I am sure you have noticed we have a housing crisis… Young people in particular are affected. This autumn we will be launching a cross-party campaign to tackle this most important challenge. Here’s more context about where we are as a nation…
The Situation:
Individuals aged between 25-34 are the most likely to begin their journey in homeownership, and beyond this age the chance of buying a home diminishes rapidly without intervention by major policy change. Renting offers flexibility, but ownership affords stability. 73% of renters surveyed in 2018 would rather own their own home given the choice. Home ownership reduces the risk of high housing costs later in life, provides opportunities for saving as owners are no longer paying rent and saving for a deposit, and can allow for substantial capital gains with the rising cost of housing.
Youth home ownership rates rose rapidly from the 1960s until 1989 with 51% of young family units (a single person or couple living together). This trend rapidly reversed with rates falling to 39% prior to the financial crisis, and have since fallen further to 25% in 2016. There have been tentative signs of a turnaround since with rates rising to 28% on the eve of the pandemic. The picture is not uniform, with significant regional variation. Youth home ownership rates were collapsing in Outer London & the South East before the financial crisis, falling by 25% and 21% respectively between 1989-2006. In the North East and Scotland, rates grew by 5 and 3 percentage points respectively over the same period. Yet accessing ownership is a universal problem for young people, with much less regional variation in 2019 than in 1989.
Additionally, there are stark relative differences in these figures. Ownership has halved for the poorest 40% of young people between 1989-2019, but dropped by 25% for the highest quintile. Ownership rates for the lowest paid occupational groups - elementary and sales workers - have more than halved over this period, whilst managers and senior officials have experienced a far smaller decline and greater post 2016 recovery. Young private sector ownership rates have fallen at twice the rate of their public sector counterparts. The chances of a young single person owning a house today stand at 11% as compared with 52% compared with couples. In 1989 the chances for couples were around three times greater.
Some argue that the decline in home ownership is due to different lifestyle choices. However, only 13% of the overall decline can be attributed to the changing makeup of the younger generation.
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