Press Story

The housing crisis is increasingly chipping away at community spirit, according to a new report from the think tank IPPR. The report shows that buying a home is now beyond the reach of most young people and that those who rent feel far less attached to their local neighbourhood communities.

New IPPR analysis finds that owning a home increases someone's sense of belonging to a neighbourhood as much as simply living there without owning for fourteen years. For example, when controlling for all other variables, an individual who has lived in the same home for 20 years yet does not own it is likely to feel the same sense of neighbourhood belonging as someone who owns their home but has lived in it for just 6 years.

While 88 per cent of young people aged 18-30 say they want to own their own home in the next ten years, a majority believe it may be unattainable for them. More than half (51 per cent) of those currently renting from a private landlord said they would not be able to own.

More one in five young people (22 per cent) who live in a house share (shared accommodation with people they didn't know before they moved in) said that their housing negatively affects their sense of safety and security. And one in five of 31-44 year olds without children said they were delaying starting a family because of a lack of affordable housing.

The report shows that by 2020, the total number of young people owning their own properties will decrease by approximately 1.1 million to 1.3 million. The number of people living with their parents in their 30s will grow by half a million and an additional 1.5million 18 to 30-year-olds will live in the private rented sector.

IPPR's interviews with young people show that their housing circumstances have an impact on their levels of life satisfaction:

young people spoke about wanting housing stability before having children, and delayed having children in the absence of secure housing
young people simply felt unsafe, living in areas they didn't want to, or with people they didn't know

Dalia Ben-Galim, Associate Director at IPPR, said:

"Last week Nick Boles the Planning Minister said we need to significantly increase levels of house building to meet the need for new homes. He's right, but not just because of the economic benefits it would bring. Our analysis shows that the lack of houses is dragging young people down. We found it is stopping many of them from them building their careers and starting a family.

"A huge majority of today's younger generation want to own their home, just as most of their parents have done. But the prospect is slipping ever further over the horizon. Insecure renting stops them from putting down roots, but it is also bad for society too. Our analysis finds that home ownership has a big effect on people's sense of belonging to their neighbourhood.

"Unless we increase supply, a decent secure home, whether to rent or buy, will remain out of reach for far too many young people - especially those who can't rely on their parents for financial help."

The report recommends:

reforming the planning system,
providing stronger incentives to develop land
creating new sources of investment to boost house building
reforms to the private rented sector such as creating family tenancies to offer greater security to families
a job guarantee for young people to mitigate the long-term 'scarring effect' of being out of work for a significant period of time
universal childcare provision and a more family friendly work agenda

Notes to Editors:

IPPR new report - http://www.ippr.org/publication/55/10017/no-place-to-call-home-the-social-impacts-of-housing-undersupply-on-young-people

A 4 minute animation based on the report is available at: http://www.youtube.com/watch?v=Sjpdkn9C2t8&;feature=youtu.be

IPPR's report - Young People and Saving - is available from: http://bit.ly/IPPR9849

IPPR's report - Young people and savings: Polling results - is available from:http://ippr.org/publication/55/8650/young-people-and-savings-polling-results

IPPR research shows that the housing crisis is set to get worse. Demand for housing in England will outstrip supply by 750,000 homes by 2025. This is equivalent to the combined current housing demand of Birmingham, Liverpool and Newcastle, with particular pressure in the south east.

Over the last decade, in particular, prices have diverged widely from incomes. Between 2001 and 2011 wages increased by 29 per cent whilst house prices increased by 94 per cent. In 2001, the average price of a home was £121,769, 7.4 times an average individual salary of £16,557. In 2011, average house prices are £236,518, or 11.1 times an average individual salary of £21,330.

Nearly 3 million adults aged 20-34 are living with their parents, an increase of almost half a million (20 per cent) since 1997, despite the fact that as a proportion of the population this age-group stayed largely the same.

The report shows that buying a home is now beyond the reach of most young people. Mortgages are only obtainable by those able to provide a large deposit and have a high and steady income. The consequence is that the number of households buying a home independently has slumped. In 1997, fewer than 10 per cent of first time buyers under 30 had help from family or friends. By 2005, the figure had risen to 45 per cent.

Rates of home ownership grew from the early 1980s up until 2002 when 69.7 per cent of households owned their own home. By 2010 this had shrunk to 64.7 per cent.

The number of social housing units has declined from five million in 1982 (or 30 per cent of the housing market) to 3.85 million (or 17 per cent of all homes). There is significant unmet demand with 1.8 million households on a waiting list for a social home. The significant mismatch between supply and demand has led to social housing being tightly rationed and inaccessible for most households, other than the most disadvantaged.

Contact:

Richard Darlington, 07525 481 602 r.darlington@ippr.org