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20 September 2017

8 statistics proving that the housing market eats millennials for breakfast

It used to take three years to save up a deposit. Now it takes 19. 

By Julia Rampen

Labour’s most popular manifesto promise in the 2017 snap election, according to YouGov, was not scrapping tuition fees or nationalising the railways. It was capping rents in line with inflation. 

There is a reason it captured the imagination. The average house costs 7.6 times the average salary, according to the Office for National Statistics – a figure that disguises the swollen property markets in the cities where aspiring buyers are most likely to find work. In a society that values home ownership, workers in their 30s and 40s are still sharing rented flats – often part of a portfolio of buy-to-let properties owned by babyboomer landlords. 

And yet, at the same time, the housing market shows up our collective lack of imagination. Millennials are still instructed to “get on the housing ladder”, as if renting was just another peculiar fad, or to stop drinking lattes, as if the nation’s coffee habits kept up with the 259 per cent increase in house prices between 1997 and 2016. 

A new report from the Resolution Foundation shows how the housing market is widening inequality. Here are some of the most startling facts: 

1. 30 somethings

Half a century ago, only one in ten 30 year olds lived in private rented accommodation. Today, four in ten do. 

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2. That saving feeling

A generation ago, the average young family could save up a typical deposit for a house in three years. Today, that same family would have to save for 19 years. 

3. The rents

Today’s families headed by 30 year olds are only half as likely to own their home as their parents were at the same age.

4. A tuppence on a mortgage

In the 1960s and 1970s, homeowners with a mortgage spent about 5 per cent of their income on housing costs, while renters spent 10 per cent. In 2016, mortgage borrowers pay around 12 per cent of their income on housing costs. But here’s the biggie – private renters were paying 36 per cent of their income on housing costs. 

5. Generation commute

Resolution estimates that by the time millennials turn 40, they will spend close to three more full days commuting than their parents did at the same age. 

6. Gradual improvements

According to the first National House Condition Survey in 1967, one in five properties did not have a sufficient supply of hot water, and one in ten was deemed unfit for habitation. Fast forward 50 years, and one in ten homes still have no central heating, and one in five fail the decent homes standard. Both in 1967 and 2017, the worst cases could be found in the private rented sector. 

7. Cosy times

On average, a household member in private rented accommodation has seven square meters less today than they did in 1996. By contrast, homeowners have an extra seven square meters. 

8. Antisocial housing

In 1981, nearly one in three families lived in relatively affordable and secure social rented housing. Today, just 14 per cent of families do.