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Millenials on track for housing storm

Photo Credit: Cmglee

Currently in the UK the supply of housing is considerably lower than demand. The Housing Report suggests that the government is currently failing to deliver on several key housing issues, including: housing supply, affordability in the private rented sector and homelessness. From the period of 2012- 2017 house prices have increased by 31 per cent and the average profit margins of the top five developers has increased from 12 per cent to 21 per cent, compared with only a 24 per cent rise in output levels.

The government plans to build 300,000 new homes each year from the mid-2020s onwards, however it is highly unlikely that this goal will be reached. The NAO states that between 2005-2006 and 2017-2018 on average only 177 000 new homes were built. This is considerably lower than the government’s targets. To meet the ambition of 300 000 new homes per year the housing department will need to oversee a 69 per cent increase in the average number of new homes built. The lack of supply can be attributed to the fact that more than half of local councils have failed to draw up adequate plans to solve the worsening crisis.

The housing shortage is expected to have dire effects for young people. A study by the National Housing Federation has found that nearly 1.3 million children are living in poverty in privately rented homes in England. This is an increase of 69 per cent since 2008. The report also states that almost 242 800 of these children would not be living in poverty if they had access to social housing as their parents would be paying lower rents. “It’s no coincidence that the number of people trapped in expensive and unsustainable private renting is still incredibly high, while the supply of new social homes has become almost frozen” says Polly Neate, the Chief Executive of Shelter.

A report by the cross-party think-tank Civitas has found that nearly one million more young people are living at home with their parents than was the case two decades ago, the growth being highest in London. The proportion of people aged 20-34 who live with their parents has risen from 19.48 per cent in 1997 to 25.91 per cent in 2017, equating to 3.4 million. This marks the collapse of single living, if young people do decide to move out, they are often living with large groups of people. If the government does not recognise this fact it could exacerbate the housing crisis even further.

There is also an issue of overcrowding. Overcrowding in social housing has reached an all-time high with more than 300 000 households living in overcrowded conditions. The issue is not just with social housing, as more than a quarter of a million households are overcrowded in privately rented homes. This is the second highest recording since 1996 according to the English Housing Survey.

The current government has been under fire recently from Jeremy Corbyn who has promised a review of social housing policy. Corbyn has also promised that his Labour government would aim to introduce rent controls. Some argue against rent controls as they disrupt the workings of the free market, however renting prices have soared, especially in the UK’s largest cities. London had the highest median monthly rent at £1452, while the North East had the lowest at £475. The severity of the housing crisis has made it clear that housing policy should be at the forefront of the government’s agenda.

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