The Resolution Foundation think tank has just published a report called “Home Improvements: Action to address the housing challenges faced by young people”. Some of the charts in it are fascinating – if, that is, you are fascinated by charts showing quite how badly stuffed millennials are getting by Britain’s ever exciting housing market.
Luckily, I am. So here are some of the best ones, with some thoughts about what they tell us.
1. The number of kids growing up in the private rental sector is going through the roof
Between 2003 and 2016, the number of families with kids living in their own homes dropped by 20 per cent. Over the same time period, the number of families with kids living in private rented accommodation tripled.
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This, to my mind, is one of the best arguments for legislating to ensure longer, more secure tenancies and to force landlords to do all those tricky things like fix broken boilers immediately, rather than in a couple of weeks when they get around to it. It’s one thing expecting 22 year olds to put up with shitty rented flats, where they can be turfed out at almost no notice. Expecting families with kids to do the same is a whole different thing.
Apart from anything else, forcing a family to move can also mean pulling its kids out of school, with all the disruption that implies. An under-regulated private rental market isn’t just annoying millennials: it risks ruining childhoods.
2. Rents are not actually rising that fast
There’s a recurring argument on housing Twitter about whether housing costs are actually rising – and therefore whether we have enough homes. Nobody questions whether it costs more to actually buy a home, since it obviously does. But there are those, like economist Ian Mulheirn, who argues that the cost of renting is stable, or even falling.
The Resolution Foundation report suggests that Mulheirn has a partial point. In most of the country, since 2003, rents have risen slower than general inflation.
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But there are several caveats to this. One is that the same cannot be said of London, where rents clearly have risen faster than inflation. Since such a high proportion of young renters are in the capital, that goes some way to explain the apparent mismatch between anecdotal experience and hard data.
Another issue is that it seems to matter when you start counting. Start in 2003, and yes, general inflation has been greater than rental inflation in every other region. Since 2010, though, it looks a lot since rents are catching up. Look at the last eight years in London, and rents have risen much faster than inflation.
And then there’s this:
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To quote the report:
As Figure 4 shows, average rent rises across England topped CPI in two-fifths (62 months) of the 146 months covered. Larger spikes were less common, while average rents still rose more quickly than CPI+1 per cent in one-fifth (30 months) of the period.
That reads to me a lot like many rents will feel rents are rising – even if, on aggregate and over the long term, they’re not.
3. Help to buy has screwed most non-homeowners
The Help to Buy policy was sold as a way of helping first-time buyers onto the ladder, by providing them with government subsidies. The reality, however, is that, by pouring money into a market that wasn’t building enough homes, it just pushed prices up even further out of reach.
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Once again we must give thanks to David Cameron for helping create this crappy country we’re all living in.
4. Fewer young people have a home of their own
Rising rents aren’t the only figure suggesting we need to build more homes: so does the growing proportion of young people forced to share their living space.
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The millennials are the first generation in the last century in which a majority were forced to share at the age of 25. That probably doesn’t translate over-crowding in the Dickensian slum sense – but it certainly suggests that we could do with building more homes in the places people want to live.
Sadly, though…
5. We’re not building enough homes
Over the last 20 years, the government – every government – has repeatedly missed its house-building targets. The only time any managed it was 2005-6, at the height of now looks like an unsustainable boom.
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The government’s current target is 300,000 new homes a year, vastly higher than it’s managed in decades. We don’t have the data to be certain, yet – but I’m going to go out on a limb and suggest it’ll miss that, too.
So, to sum up, everything is fine.
You can read the full report here.
Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.
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