Home ownership out of reach for a third of young people, says report

A report from think tank Resolution Foundation has shed light on the problems facing young people in the housing market.

It says a third of those born between 1981 and 2000 could still be living in rented accomodation by the time they reach pensionable age, and up to 50% could be renting either privately or in the social housing sector well into their 40s, should home ownership growth follows the ‘weak pattern’ of the 2000s.

The report also calls for an overhaul of the private rental market and says millennials today are spending more of their income on housing than previous generations did at the same age but getting less for their money when it comes to security and quality of life.

The report says that despite large rises in house prices and falling ownership rates, young people’s homeownership aspirations remain at high levels. It also says there is ‘clear evidence that Help To Buy schemes produce an “inflationary effect,”‘ and propose that the scheme is gradually phased out.

The report recommends that the government:

• Introduce indeterminate tenancies as the sole form of private rental contract available in England and Wales, following Scotland’s lead.
• Introduce light-touch rent stabilisation that limits rent rises to CPI inflation for set three-year periods.
• Establish a new housing tribunal with powers to adjudicate on possession applications and challenges to rent rises which is cheap to access, speedy and can offer effective remedy.
• Bring England into line with the rest of the UK by requiring landlords to register with their local authority if they rent out property.
• Target Help to Buy equity loans by making them income-contingent, offering assistance only to households with incomes of less than £60,000 a year.

Lindsay Judge, a policy analyst at the Resolution Foundation, said: ‘Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt – paying a record share of their income on housing in return for living in smaller, rented accommodation.’

A Ministry of Housing, Communities and Local Government spokeswoman said: ‘Our Help to Buy scheme and the recent cut in stamp duty are helping more young first-time buyers get on the property ladder. Figures show that we are seeing the highest number of first-time buyers for more than a decade.

‘But we’re also helping to ensure that everyone has a safe and decent home by giving councils stronger powers to crack down on bad landlords and consulting on stronger protections for tenants themselves.’

Read the report here