Another week, another stat about millennials and housing. This week it’s a report which found that people aged between 26 and 42 are buying fewer homes than ever, accounting for just a quarter of property transactions in 2021.
Data analytics firm Outra found that the proportion of people in that age group buying a home has dropped by 11 per cent in five years.
It also found the average price paid by millennials last year was £239,000, below the national average of £270,000, which Outra said suggests that properties in more expensive areas such as London and the South East are unaffordable for that age group.
If you can still read while rolling your eyes at the prospect of yet more whining from the babies of the adult world, then consider that the oldest millennials are now a pretty ripe 42, the youngest are 26. Traditionally these would be prime home-buying ages.
In an economy that’s geared towards home ownership as a major source of financial security the fact that the proportion of people in that age bracket buying a home has dropped by 11 per cent in the past five years is significant.
The report worries the under 40s are facing a ticking financial time bomb as they age.
But years into the housing crisis, instead of asking how more people can access this asset at ever more wildly inflated prices, we should question a culture where housing has become an asset first and foremost, rather than fulfilling its primary purpose as somewhere to live.
This view is gaining momentum with serious housing analysts acknowledging that the property market is out of control.
The UK Housing Review for 2022 states that more debate is needed about high house prices, saying that “the housing market used to spread wealth, but is now a powerful engine for inequality, with many households unable to access homeownership and with higher prices also triggering higher rents.”
The Bank of England’s focus on financial stability, rather than addressing asset-price inflation was also highlighted as an issue in the review, a concern echoed by Positive Money.
In a recent report the campaign group found that two-thirds of Brits support the Bank being tasked with keeping house price inflation low and stable in a similar way to how it currently treats consumer price inflation.
The report debunks the common narrative that high house prices are the result of low home building, instead blaming the transformation of homes into financial assets through loosened financial regulation, tax incentives, right to buy and a deregulated private rental market.
To keep house prices stable and bring down the house price to income ratio over the long term, the report suggests higher taxation for investment properties; and improving alternatives to home ownership by increasing affordable housing provision and regulating private renting.
Danisha Kazi, a senior economist for Positive Money, says: “Governments have failed to deal with the housing crisis because of a pervasive view that the public, who are majority homeowners, would be against policies that restrict house price growth. However, the evidence suggests that most people, including homeowners, support a fairer approach to housing which seeks to stabilise prices, rather than letting them inflate endlessly.”
From fairer taxation to a massive new social housing programme and a better regulated private rental sector, the ideas are there, we just need the political will to accomplish it.
