Young people in UK giving up on ever buying homes

Starter homes have gotten so expensive, many young professionals are opting out of trying to obtain homeownership instead of saving to buy a house.

In the U.K., 42% of adults under 40 who do not own a home do not see themselves buying one in the next decade, according to a survey from Zoopla. 38% percent of those adults earn over £60,000 annually.

A somewhat similar situation is going on in the U.S., with many homeowners choosing not to sell their old houses since they got locked in at a low interest rate on their mortgage, and rates have since shot up.

'Guppies' are the latest real estate phenomenon: young people giving up on ever buying homes, Jordan Hart, Business Insider

some related threads that might be of interest:
New York Times complains about lack of affordable "starter homes"
Millennial homeowners renovate instead of moving up
Housing affordability over time
The rise of the professional class in big cities - and others getting pushed out (May 22, 2018 Economics)

 

Pair this with the fact that the UK has cracked down on landlords and making it difficult for them to rent property so much to the point many landlords are simply opting out and giving up renting their properties.

Which has a knock on effect creating scarcity on properties available to rent driving driving up rental prices.

It creates a real pickle and housing crisis in the UK.

 

seems the whole world is getting bad, not sure what the future holds

I think letting foreigners buy and rent property in mass has not helped any

 

I do know that many policies passed by these progressive cities to supposedly "help renters" have paradoxically only made it more costly and risky for landlords to rent to them, so the rent prices have gone up, and in many cases the landlords are selling to homebuyers, people who will actually live in those homes. Even many cases of apartment buildings being transformed into condominiums where each unit is sold to a new resident.
But that seems to be the opposite of what has happened here.

I can see both some pros and cons to this, and am unsure exactly how it will balance out.

I think in some poorer northern areas it might result in higher vacancy levels, since owners will have less incentive to rent or sell.

If city policies make it more difficult to rent and push housing towards resident ownership, that could potentially help people by eliminating landlords and lowering the cost of housing. But on the other hand, it could also hurt people who may not have the means to buy the housing, and result in more inflexibility since there may be some individual situations where it is more advantageous to temporarily rent. It could also be more likely to result in gentrification, with only wealthier residents being able to live there. And also a push towards older middle aged residents, pushing out younger people who are less likely to have savings.

 

All these points -

Planning is too strict.

When a housing estate appears, they're junk and expensive because the developer is only after mega money.

Immigrants, and the government give free accommodation to asylum seekers etc..

People live longer, houses coming onto the market is an awful lot slower than the population increase.

Younger generations fail to save for house buying, money goes on iPhones, Netflix, latest fashion etc..

 

The housing crisis is only going to get worse

Which group of British voters is most likely to support policies that undermine their own economic interests? Marxists will tell you it’s the working class. I want to propose a different answer: young progressives.

Consider the economic situation of a British graduate in her twenties, born outside of London to parents of modest means. In order to fully capitalise on the value of her degree, she will want to work in London: according to the Institute for Fiscal Studies, the growth of high-end industries since 1993 has occurred almost exclusively within the capital. Our young graduate is already contending with a difficult set of circumstances, with the tax burden set to reach a post-War high, and student loan repayments to meet. But the worst part of it is that record high property values in Greater London mean she will be spending more than half of her take-home pay just to rent a room in a flat share. And not a nice one, either.

Actually buying a flat in London -- let alone a family home -- now requires either an enormous cash injection from the bank of mum and dad, or a six figure salary. Our young graduate assumes that she will be renting forever, and she’s probably right about that. She may well delay starting a family because she feels that she cannot afford to. Eventually, she may well be forced to move out of London and take a lower paid job elsewhere, at a cost both to her own professional prospects, and also to the nation's tax revenue.

If she's a progressive, she will likely tell you that the cause of her housing misery is Nimbyism, and she's not entirely wrong, since our planning system does make development very difficult. What she won’t mention -- what she probably won't even realise -- is the role of progressive policy on immigration and social housing in worsening her economic situation.

Figures released by the Office for National Statistics this week revealed net immigration figures of 672,000 for 2023, as well as its upward revision of 2022 figures to 745,000. In other words, last year Britain saw more immigration than from every year between 1945 and 2000 combined. Yet only around 233,000 new homes were supplied in 2021-22.

This would be enough of a problem on its own. But the plight of young would-be Londoners is made far worse by a phenomenon that very few voters are aware of, since it has never been in the interests of either Labour or the Tories to advertise it, given that both parties are implicated in the disaster.

A very high proportion of housing units in Inner London boroughs are designated as social housing: 31 per cent overall, with Islington (39 per cent), Southwark (40 per cent), and Hackney (40 per cent) above that average. And the proportion of London social housing occupied by people born overseas is close to 50 per cent, up from 40 per cent ten years ago. Meanwhile, only 56 per cent of working age social housing residents in London are economically active.

In other words, our young graduate's tax revenue is not only being spent on housing hundreds of thousands of unemployed foreign nationals in some of the most expensive postcodes in the world, it is also being used to reduce the supply of private housing available to her, thus driving up prices even further.

This state of affairs is a consequence of post-1990s mass migration, and system of social housing allocation that does not distinguish between immigrants and natives, or indeed the employed and the unemployed. No major political party is proposing an end to either policy, and no mass movement of young Britons is demanding change. At least, not yet. ​

The housing crisis is only going to get worse , by Louise Perry, The Telegraph, November 25, 2023

 

Renting is common in many European cities because owning is so expensive. In Switzerland 61% of the people are renters and in Germany 54% are, and its not a new thing either.

In US, 36% of the people are renters

 

The main reason apartment renting is more common in Europe is because Europeans are more concentrated into cities, especially and typically older cities that were built with a design layout before cars. A larger share of Europeans do not even own cars, due to the existence of trains and excellent public transportation.

If one looks at the history in the U.S., desegregation and deteriorating race relations, with increasing crime rates, were responsible for much of the move out of the big cities and into the suburbs (from 1945 to 1960, then again from the late 70s to early 80s).
Something that did not have a historical parallel in Europe.

Western Europe also traditionally had a higher population density than most of the U.S., affecting the establishment of housing patterns.

 

Actually, 80% of people in US live in cities vs 72% in Europe. As for owning car, its true that their public transit is far superior to ours, but some countries have high car ownerships.

 

I think you are lumping together different countries in Europe. And the "cities" in Europe are not really comparable to "cities" in the U.S.

As I pointed out in a different thread, about 85% residents in the German city of Berlin rent their homes, 53% for the entire country of Germany, and the average within the European Union as a whole is only 30%.
(see Berlin's renters face more misery as housing crisis deepens )

In England (a region of the U.K.) 19% of all households rent from the private sector, with an additional 17% being in public social housing.

 

Yes, its European average. NYC resembles big European cities in the sense that lot of people live in the core city whereas most other US cities, people live in the suburbs while the city itself is just a place where people go to work, and shop. I lived in Cincinnati (typical mid size US city) in the 1990s, and I don't' think anyone lived in the city itself.

Miami.....yes, people do live in the city in high-rises and Ft Lauderdale is becoming the same. Both places need better public transit, and Elon Musk 'boring company' has some suggestions about tunnels.

 

Except that the entire region surrounding NYC is a sprawling suburban metropolis (the "Northeast megalopolis"). The entirety of Long Island is almost a "suburb" of NYC. Even up into Connecticut and much of New Jersey.

While it may be true NYC itself is comparable to a big European city, the rest of that pattern does not really hold so much for the big city areas in Europe, at least not traditionally (like before the 1990s).

 

Yes, but same is true with London, Paris and everywhere. My point was that lot of people live downtown in NYC (Manhattan, Brooklyn, and Bronx), which is not as common in most US cities vs Europe.

 

It's much more true in the New York megalopolis region. Go back to 1980 and the suburbs connected to New York City sprawled out far more than London or Paris, much less any of the other big European cities.

I have no disagreement with this claim.

 

Sure, the NYC metropolitan area, which includes parts of New Jersey, is quite impressive indeed, with 25 million residents and it generates 10% of the entire US economic output.

As for London, I am not too familiar with the size of their suburbs, but if you look at the picture below, you'll see the city of London is only a part of the big picture. London metro has 32 boroughs. NYC had 5 'boroughs' (South Florida is jokingly called the 6th Borough).

London boroughs map

 

You nailed it! My German friends tell me that German Millennials and Gen Z'ers don't even imagine being able to buy their own homes anymore. And yes, this is true all over Europe, too. So, what do Europeans do? They continue to import thousands upon thousands MORE migrants from all over the Middle East, Eastern Europe, and Africa. And that wouldn't necessarily be so bad in itself except for the fact that the big majority of these migrants brought little if any money with them, and they so they can't support themselves. They quickly go on one sort of government-provided welfare, just as though they were citizens of the country they entered.

 

Only 72% of Europeans live in "cities"? Do you have a source for that info? The Europe I've been in was highly-dense in population, and maybe the difference is in how we define what a "city" consists of. Germany, for instance, doesn't have all that many big "cities", but lots of towns with less than 100,000 inhabitants.

A lot of Germans do own cars, however, and their usual method for parking them is to have about half the car draped up onto the sidewalks! And, for a lot of Germans who do live in urban areas, it can be as expensive to have a garage to park the damn thing in as it is to keep fuel in them....

 

When I said 'city', I mean urban areas. Google is your friend, I don't remember the source, but I Googled again, and now I see 74%, ranging from Slovakia at 54% from to Belgium at 98%

Percent urban population - Country rankings
The average for 2022 based on 27 countries was 74.18 percent. The highest value was in Belgium: 98.15 percent and the lowest value was in Slovakia: 53.91 percent. The indicator is available from 1960 to 2022. Below is a chart for all countries where data are available.
https://www.theglobaleconomy.com/rankings/Percent_urban_population/European-union/#:~:text=Percent urban population - Country rankings&text=The average for 2022 based,countries where data are available.

 

That's a great site! I'll bookmark it for future use. Thank you!

 

Yes, you can also use the site to look up rural population per area

 

Keep in mind that list may not be entirely accurate, in the sense that its meaning hinges on the precise meaning of "urban".
For example, that site you got your statistics from lists the United States as 83.08 percent urban population, yet according to HUD, 52 percent of U.S. households describe their neighborhood as "suburban".

If "urban" is in fact counting "suburban", and you're trying to use the "urban" statistics to show why Europeans do not own houses, then there is a flaw in that logic.

 

Of course suburban is counted as part of urban. Suburb = an outlying part of a city

There are two kinds of places, - rural and urban.

 

Well then, your argument completely fails, doesn't it? What was the point of pointing to those statistics then?

Those statistics don't even suggest Germany is more urban than the U.S.

 

What argument? I am providing facts, not arguments. US has more people living in urban areas than Europe. That's what I said from the beginning

Why should it?