New figures released on Wednesday confirmed what we already knew: homeownership is becoming increasingly out of reach for young people. A survey by Santander found 70% of 18- to 34-year-olds now believe that homeownership is over for their generation. Our housing system has been allowed to degenerate to such an extent that secure and affordable housing is increasingly unavailable to working-class people, and in many places middle-class people too. But it’s not for a lack of ideas that this has happened. What we are lacking is the political will.
Fifty years ago the country had a fairly stable housing system. The need for secure, affordable housing of the middle class was largely met through homeownership, and that of the working class through widely available social housing. But a reliance on the private market to deliver homes since the 1980s, and the loss of millions of social homes over recent decades, has destroyed this system.
In the 1980s, after moving to a new town, my parents left their council house and bought a home. They were able to do this because the historic link between house prices and local incomes – between three and four times average annual income – was still intact. For my generation, both sides of this move are almost unfathomable. Social housing for young people without children? Homeownership in your 20s? Impossible.
When I first moved to London in the early 2010s I spent years paying well over half of my income in rent. Even now, as my income has grown and my employment has become more secure, homeownership remains out of the question: house prices are 14.5 times the average income in London.
When it comes to housing, class intersects with the intergenerational divide, as well as race and gender. Only those whose parents have sufficient money to pay their deposit can access homes to buy, leaving most of the rest of us trapped in the insecure, unaffordable private rented sector.
But it needn’t be this way. The housing crisis is the result of policy choices that could be undone in less than a generation. If the government implemented policies that prioritised the provision of secure, affordable housing for everyone – regardless of age, class, race or gender – in just 10 years’ time young people’s housing options could look radically different, and a lot more hopeful.
Social housing in 2029
With 200,000 social homes built per year for the last decade, and the right to buy halted, the social housing deficit – estimated by Shelter in 2019 to be 3.2m homes – is well on its way to being met in a decade’s time. For young people and the working class, social housing is once again becoming the norm, providing secure, affordable housing outside of homeownership.
Targeted initially at those whose needs were most radically unmet by the old system – homeless people and those living in temporary or overcrowded accommodation – as the stock of new social housing has increased, access has been broadened. For many young people, key workers and other middle-income earners social housing – architecturally attractive, and delivered as part of the Green New Deal to carbon-neutral standards – is becoming their chosen option, either for the long term, or while they save for a deposit.
Private renting in 2029
The old private rented sector, created in 1988, was designed primarily to attract investment, and was among the most unaffordable and insecure in Europe. But since its overhaul in 2019, bringing the sector in line with many European norms with the introduction of open-ended “lifetime” tenancies and rent controls, standards have significantly increased.
For young people not yet able to access homeownership or social housing, private renting now provides a more secure and affordable alternative. The size of the sector has shrunk though, as the need for it has lessened, with many of the former private rented homes having been bought and converted to social housing.
Homeownership in 2029
Over the decade to 2029 house prices steadily decreased, slowly bringing homeownership back within reach of many young people.
The increased social housing stock reduced the demand for private housing, and helped bring prices down. At the same time, much of the “unhealthy” demand for homes – demand from investors, as opposed to demand from people who needed somewhere to live – disappeared from the housing market, reducing the competition for homes, and so lowering prices. With increased security and affordability in the private rented sector, targeted taxation on housing-as-assets, the clamping down on offshore ownership, and a bolstered pension system, investors – big and small – have become less interested in housing as an investment, with more affordable house prices the result.
Alongside this, increased public and community ownership of land – through a People’s Land Trust – have taken much land and housing outside of the free market, with the memory of the decades-long mistaken reliance on the private market to meet our housing need still looming large. Homes in 2029 are once again valued as places to live, and not primarily as assets, and young people are increasingly finding themselves able to access homeownership irrespective of their parents’ wealth.
In 2019, this might sound utopian. But with sufficient political will, it’s eminently achievable.
• Joe Beswick is head of housing and land at the New Economics Foundation