Generation rent: young people cannot afford to buy homes
by Jenny Pennington
11 December 2012
Young people who did not own their home do not really seeing the point of committing to the area in which they lived or getting to know the people they shared a street with, says think-tank
United Kingdom Census data released this morning has shown us that the housing market has undergone significant changes across the last 10 years. Between 2001 and 2011 the proportion of households living in a home they own has declined from 68 per cent of households to 64 per cent. The proportion of households renting from a private landlord has risen dramatically from 9 to 15 per cent. In London, the number of people renting - 29 per cent - now exceeds the number of people with mortgages, some 19 per cent. It is likely that young households are driving this trend.
We know that home ownership is dropping dramatically in younger age groups. In 2011, 17 per cent of 18-24 year olds lived in a home that they owned. In the early 1990s, this was more than 30 per cent. Yet Institute for Public Policy Research evidence released yesterday shows that this tenure shift is not due to lifestyle changes or shifting housing aspirations. The IPPR polling shows that 88 per cent young people aged 18 to 30 still say they want to own their own home in the next 10 years. A majority believe this will be unattainable.
A mismatch between housing supply and demand since the 1980s has led to house prices that have risen three times as fast as incomes across the last decade. Securing a mortgage to cover these costs is next to impossible for most young people and saving for a deposit while paying rents that in the private sector have doubled across the last 10 years, is a further challenge. More than half - 51 per cent - of the young people who we surveyed who are currently renting from a private landlord felt that they would not be able to own their home in the next 10 years.
Beyond these numbers, these changes are having a real and significant impact on young people's lives and on society. As well as having to compromise on ownership aspirations many of the young people we spoke to struggled to access housing that was of the quality and in the location that they wanted, or saw no other option than to move back to their family home. Some young people felt unsafe, living in areas they did not want to or with people they did not know. High housing costs meant that the skills, training and job opportunities open to them had narrowed as they struggled to live in areas where opportunities were.
Most compellingly, young people felt unable to find the housing stability they needed to move into adulthood, to find a space they could be proud of and a secure decent home that they felt they could raise a family within. We know that households delay having children for a variety of reasons. Polling this year identified the impact that the housing crisis is having. One in five 31 to 44-year-olds without children have delayed having children because of a lack of access to an affordable home.
Secure housing also makes a real difference to the way people invest in a particular community. Owning a home increases a person's sense of belonging to a neighbourhood. For example, an individual who has lived in the same home for 20 years without owning it is likely to feel the same sense of neighbourhood belonging as someone who owns their home, but has lived in it for just six years. Young people who did not own their home talked about not really seeing the point of committing to the area in which they lived or getting to know the people they shared a street with.
These are the things that make a vital difference to whether we build a common life together. Those we spoke to were realistic that buying a home requires sacrifices and financial prudence. However for many the sacrifices they were looking at involved putting all other areas of their lives on hold. Today's census figures demonstrate that the housing crisis is now having impacts across the country and across society. Unless we increase supply a decent secure home, whether to rent or buy, will remain out of reach for too many young people.
Jenny Pennington is a researcher at the Institute for Public Policy Research think-tank, in the United Kingdom
United Kingdom Census data released this morning has shown us that the housing market has undergone significant changes across the last 10 years. Between 2001 and 2011 the proportion of households living in a home they own has declined from 68 per cent of households to 64 per cent. The proportion of households renting from a private landlord has risen dramatically from 9 to 15 per cent. In London, the number of people renting - 29 per cent - now exceeds the number of people with mortgages, some 19 per cent. It is likely that young households are driving this trend.
We know that home ownership is dropping dramatically in younger age groups. In 2011, 17 per cent of 18-24 year olds lived in a home that they owned. In the early 1990s, this was more than 30 per cent. Yet Institute for Public Policy Research evidence released yesterday shows that this tenure shift is not due to lifestyle changes or shifting housing aspirations. The IPPR polling shows that 88 per cent young people aged 18 to 30 still say they want to own their own home in the next 10 years. A majority believe this will be unattainable.
A mismatch between housing supply and demand since the 1980s has led to house prices that have risen three times as fast as incomes across the last decade. Securing a mortgage to cover these costs is next to impossible for most young people and saving for a deposit while paying rents that in the private sector have doubled across the last 10 years, is a further challenge. More than half - 51 per cent - of the young people who we surveyed who are currently renting from a private landlord felt that they would not be able to own their home in the next 10 years.
Beyond these numbers, these changes are having a real and significant impact on young people's lives and on society. As well as having to compromise on ownership aspirations many of the young people we spoke to struggled to access housing that was of the quality and in the location that they wanted, or saw no other option than to move back to their family home. Some young people felt unsafe, living in areas they did not want to or with people they did not know. High housing costs meant that the skills, training and job opportunities open to them had narrowed as they struggled to live in areas where opportunities were.
Most compellingly, young people felt unable to find the housing stability they needed to move into adulthood, to find a space they could be proud of and a secure decent home that they felt they could raise a family within. We know that households delay having children for a variety of reasons. Polling this year identified the impact that the housing crisis is having. One in five 31 to 44-year-olds without children have delayed having children because of a lack of access to an affordable home.
Secure housing also makes a real difference to the way people invest in a particular community. Owning a home increases a person's sense of belonging to a neighbourhood. For example, an individual who has lived in the same home for 20 years without owning it is likely to feel the same sense of neighbourhood belonging as someone who owns their home, but has lived in it for just six years. Young people who did not own their home talked about not really seeing the point of committing to the area in which they lived or getting to know the people they shared a street with.
These are the things that make a vital difference to whether we build a common life together. Those we spoke to were realistic that buying a home requires sacrifices and financial prudence. However for many the sacrifices they were looking at involved putting all other areas of their lives on hold. Today's census figures demonstrate that the housing crisis is now having impacts across the country and across society. Unless we increase supply a decent secure home, whether to rent or buy, will remain out of reach for too many young people.
Jenny Pennington is a researcher at the Institute for Public Policy Research think-tank, in the United Kingdom
RELATED CONTENT
EU property tax proposal would only deepen economic crisis
A Brussels' proposal to tax homes at 20 per cent shows how little the EU has learned from the recent crisis, claims Godfrey Bloom MEP
A Brussels' proposal to tax homes at 20 per cent shows how little the EU has learned from the recent crisis, claims Godfrey Bloom MEP
COMMENTS
