Guy Horne, chief executive and co-founder of HSPG
The past few years have been turbulent across all sectors but, in particular, the housing market has faced significant turmoil as the pandemic has triggered exponential rises in house prices. For example, the average asking price of houses rose by nearly £40,000 in the two years since the pandemic began, in comparison to just £9000 between 2018 and 2020.
This shifting market has created clear winners and losers, leaving many priced out of owning a home. However, the effects of the UK’s chronic shortage of Affordable Housing have not been felt equally. With nearly half of the UK’s homeowner wealth in the hands of the over 65s, the generational gap in the housing market is more distinct than ever before.
For many millennials, the prospect of owning their own home is a distant dream, with young people half as likely to own their home at the age of 30 than baby boomers. As rents have risen to record heights of more than £1,000 a month, the disadvantages of being unable to access the property ladder are becoming increasingly pressing. Equally, with current statics suggesting there are 25 million surplus bedrooms in England alone, this disparity in ownership seems surprising. However, with older individuals increasingly putting off downsizing, the reasoning for these unused rooms is clear.
Despite this surplus of space, younger generations are facing a shortage of Affordable Housing which is even leaving them at risk of homelessness. Currently, there are 274,000 people experiencing homelessness in England, of which 126,000 are children. With research suggesting we need 145,000 Affordable Homes to be built in England each year by 2031 to truly tackle this issue, the need for increased provision of Affordable Housing to address the generational housing gap is clear.
Yet, with the delivery of Affordable Housing falling by 12% over 2021, the government can’t be left to face this alone. Partnerships, such as HSPG’s collaborations with local authorities can help drive improved provision of this housing, while supporting local authorities in meeting their obligations to provide housing under the Homelessness Reduction Act 2017. This Affordable Housing can offer the younger generation a helping hand in getting on to the property ladder.
Putting health first
This widening gap in generational housing equality has a significant effect on the lives of those left unable to achieve home ownership. At HSPG, we know that a house is more than just ‘bricks and mortar’, it is vital for improved wellbeing and can offer people better opportunities in their lives.
For example, the charity Mind recognises poor housing as a key contributor to worsening mental health. According to the English Housing Survey, renters are more likely to be dissatisfied with their homes, meaning that generation rent could be left facing broader health problems.
In fact, good quality housing is even more crucial for the younger generation as it has a lasting impact on their lives. For example, children who have experienced homelessness are three to four times more likely to experience mental health issues, even after they have been rehomed. Clearly, addressing the housing market’s generational inequality with increased provision of good quality Affordable Housing is matter of protecting the health of younger generations.
Time for action
The generational inequalities in the housing market have been vastly exacerbated by the UK’s chronic shortage of Affordable Housing. In 2017 the government set a target of building 300,000 news homes each year, but this has consistently been missed. With the delivery of Affordable Housing continuing to fall by 12% over 2021, it is time for action rather than targets.
Equally, with the average price of a home rising by a further 12.6% in February, the need for affordable homes has never been more pressing. At the same time, rising inflation and expectations that energy bills could rise by more than 40% this Spring is leaving many people facing significant financial challenges. These financial pressures and the shortage of Affordable Housing mean that homeownership is becoming an increasingly distant dream for many of the younger generation.
As we continue to grapple with the current ongoing economic difficulties, we must seek to tackle the generational inequalities in our housing market. With home ownership offering many more benefits than just four walls to call your own, the impact of generation rent’s inability to reach the property ladder is extensive. Improving the provision of Affordable Housing will be the key to truly addressing our widening generational housing gap.