Finally, the penny has dropped for some (not all) parliamentarians that we need to build more homes in this country. This week Michael Gove gave a speech where he made a number of announcements including a new Cambridge Quarter providing 250,000 homes and plans to build more densely in cities.
As a former Downing Street advisor, I am not quite convinced that those in power fully grasp the seriousness of the challenge we face due to not building enough homes. Some would rather we did not speak so much about the subject. Below is a reminder of why we need to speak more and not less about housing…
Young Single People and Ownership Rates:
Odds for young single people buying a home are significantly lower than couples (11% versus 52%). This disparity has grown over time, falling by 54% compared to 31% since 1989. Couples have gone from being three times more likely to be able to buy to almost five times more likely.
Ownership Rates and Ethnicity:
In the early 2000s, White young people were, on average, over twice as likely to own a home than Black young people (48% compared with 19%). This inequality has increased over the past two decades, with Black young people now being four times less likely to own a home than White young people (8% versus 32%). The disparity between Chinese young people and White young people has shrunk, falling from 25 percentage points to 2 percentage points from the early 2000s to 2019.
The Decline in Young Ownership Cannot Be Explained by the Make-up of Young People or Changing Preferences:
The ‘35 is the new 25’ theory may account, in part, for the decline. Young people may still want to own a home eventually, but they simply reach major life milestones - such as leaving education and starting work - at an older age than earlier generations. The proportion of young people who are students, single, or non-parents (all of whom are less likely to own their home) has grown, as well as the regional distribution of young people. The proportion of young people who are migrants has, again, grown, with those born outside the UK having less desire to own property in the UK, or being less able to due to structural factors. These compositional factors account for only 13% of the decline. In more recent years, some of these compositional trends have reversed, helping to explain some of the recovery in youth home ownership. Despite these changes, the collective preference for home ownership remains high. In the late 1980s, just over 80% of young renters would have preferred to own - a trend which has remained stable up until 2018.
Financial Factors as the Main Reason for Young Ownership Declining:
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