Home ownership amongst the young is falling: urgent action needed
Whilst the blog is rich in detail, and I would urge anyone interested to take a read, what struck me was the falling number of young people buying homes. Through analysing the English Housing Survey, the authors had created the following graph:
The undoubtable conclusion:
“While the number of new young homebuyers did decline in the decade before the crisis, it halved between 2007 and 2008 and has only recovered modestly since then.”
Today’s blog is unsurprising – evidence suggests that since 2004 there are roughly two-thirds fewer young people buying their own home and far more young people renting privately. This is something the TUC has drawn attention to before.
The blog today also discussed a survey of private renters about why they were not intending to buy a home. Unfortunately the attitudes of young people were not explicitly considered. However, nearly 70 per cent of renters surveyed cited affordability issues and over 30 per cent cited difficulties obtaining a mortgage.
We know young people face both these issues acutely.
For example, we know that young people are paid less than those older, and the pay gap increased over the downturn. Research by the Resolution Foundation showed that between 2009 and 2014 median hourly earnings for 22-29 year olds fell by 12.7%, relative to a decrease of 9.3% for all employees.
The Bank Underground blog concluded:
“For first-time buyers, we expect the issue of affordability to persist. Increased availability of low deposit mortgages could help but are easily outweighed by continued house price increases. If we saw income of this group grow faster than average and in particular, outstrip house price inflation, then that may ease the affordability issue.”
So what to take from this?
Home ownership amongst the young is falling, and this is set to continue until real action is taken to improve the pay packets of young workers or lower soaring house prices.
The TUC believes that we need more housing of all tenure types. We need affordable mortgages for those who want to buy, decent social housing and better protection for private sector tenants. As it stands, younger adults cannot afford the space that they need to live their own lives and dream their own dreams.