Feature: The Generational Divide Behind Housing
By Guy Horne, CEO of HSPG
Over the past decade, unmortgaged house prices in the UK have grown by 67%. This significant overhaul of the market has made clear winners and losers, polarising the country not just geographically but also generationally.
According to Savills, over 46% of homeowner wealth is in the hands of the over 65s. In 1997 just 10% of 35-44 year olds in England were renting from a private landlord, today it is one in three.
The need to provide safe and secure Affordable Housing has never been more pressing. The ‘hoarding of housing’ is exacerbating generational inequalities and young people’s health, wellbeing and futures are being compromised. For these reasons, coupled with a ‘lost’ policy year following the pandemic, there must be a focus on social impact real estate.
The hoarding of Housing
There is a housing supply issue in the UK. According to Shelter, there are 274,000 people in England alone who are experiencing homelessness, including 126,000 children. This translates into one in every 206 people being without a home. Similarly, a quarter of a million people are living in temporary accommodation.
Despite these statistics, widening generational inequalities mean that, simultaneously, there are 25 million surplus bedrooms. One reason for these juxtaposing data sets is older generation buying properties that are much larger than they need, or putting off downsizing.
Research suggests that there needs to be 145,000 Affordable Homes built in England every year (looking forward to 2031) to tackle this crisis head-on. Heriot-Watt University revealed that 90,000 of these need to be for social rent, 30,000 for intermediate affordable rent and 25,000 for shared ownership.
Social impact real estate is an important tool in grappling with issues in housing supply and demand. Investing in new housing to facilitate Shared Ownership and low-cost rental homes throughout the UK eases the burden for younger generations struggling to find a permanent home.
Housing is a social determinant of health
Housing provision is not just about putting a roof over as many heads as possible.
Safe and affordable housing is a core component of the UN’s Sustainable Development plan, having a multifarious impact on often overlooked aspects of life. A home that meets an individual’s specific needs can provide a route out of poverty and improve both physical and mental health, which are again elements of the UN’s Sustainable Development Goals.
The detrimental impact that the current housing industry could have on younger generations is alarming. If housing is not realised as a true social determinant of health, people will be left without the tools they need to succeed. For example, for children, it is scientifically proven that having a safe place to live can positively impact their education.
Young people make up the majority of renters and are now renting for longer than ever before. However, according to the English Housing Survey, renters are more likely to be dissatisfied with their homes. On average, private renters and social housing tenants occupy 28.6m2 and 27.5m2 of space per person respectively. This is compared to 53.9m2 per person for households that own their home outright.
Throughout the pandemic, overcrowded and poor quality housing took a huge mental and physical toll on residents. Over half of people who said their home was not big enough reported health problems, with 11% experiencing depression.
A “lost” policy year in housing
The impact of lockdown on the housing industry has also had an unequal impact on younger generations. With housebuilding put on the backburner, Shelter predicted that since 2020 there could be as many as 318,000 much needed new homes lost.
Similarly, as the housing market effectively shut down and stagnated in March 2020, many older people delayed their plans to downsize. This went on to catalyse the housing crisis as young people were further denied chances to buy a property and enjoy the securities that come with being on the property ladder.
Shared Ownership is one way that social impact real estate can re-create the benefits that come with being a homeowner, without the large outlay or commitment of buying a whole property.
The “lost” policy year in housing has slowed down the Government’s mission to provide more Affordable Housing, creating a space for social impact real estate to act as an essential pillar of support. As housing is increasingly connected to health and wellbeing, it’s time to ensure that the future of younger generations is not compromised any longer.