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What does the latest English Housing Survey tell us about Generation Rent?

Three housing challenges facing young adults

The English Housing Survey (EHS) is run annually by the Department for Communities and Local Government and provides the most up-to-date picture of the housing circumstances of households across England. Last week saw the release of the first results from the 2014-15 survey round. The big story is that after more than a decade of decline, the homeownership rate now appears to have stabilised (at 64%), at least for the time being. However, this apparent stability masks changes within owner-occupation as the proportion of mortgagors falls away and more households come to own their dwelling outright. By contrast, the EHS shows that between 2013-14 and 2014-15 there was no increase in the proportion of households renting privately.

 

It would be wrong to interpret these trends as evidence that the housing challenges facing today’s young adults –often dubbed ‘Generation Rent’ by the media- are abating. If we peek beneath the headlines the EHS paints a somewhat less rosy picture of housing in young adulthood. Three continuing issues seem particularly important for young people, mainly because this demographic is disproportionately reliant on private rental accommodation.

 

1. Families and private renting

Although the growth of private renting has stalled or at least slowed, the EHS shows that over the last decade there has been a large rise in the proportion of privately renting households with children (from 30% in 2004-05 to 37% in 2014-15). This is worrying because -as Shelter explain in their 2012 briefing- private renting often caters poorly for families as:

(1) the absence of long-term leases with predictable rents creates actual or perceived housing insecurity, which can negatively impact on parents or lead to unwanted residential moves

(2) private tenancies tend to be less affordable than social tenancies or mortgages

(3) poor quality dwellings are most common in the private rental sector

Despite growing recognition of these problems, at present there seems to be relatively little political appetite to consider how they can best be tackled.

 

2. Affluence and inequality

The EHS shows that the average age of first-time buyers increased by two years between 2004-05 and 2014-15 from 31 to 33. Perhaps more worryingly, 72% of first-time buyers now come from households with incomes in the top 40% of the national distribution. Moreover, 27% received financial help from family/friends to enter homeownership, and 10% were supported by inheritance. It seems fairly clear that financial constraints such as low incomes, student debts, credit restrictions and high house prices are making it increasingly difficult for the less affluent to enter homeownership, even with large-scale government interventions to help people buy homes.

Compounding these problems is the growing prevalence of housing benefit reliance amongst the working poor. Between 2008-09 and 2014-15 there was a strong increase in the percentage of housing benefit recipients who were  in employment. While raising the minimum wage and the Living Wage campaign may help to address this it is not yet clear how these changes may also affect rents.

 

3. Quality

Despite considerable improvement in recent years there is still a problem with poor quality housing in the private rental sector. The EHS shows that 29% of privately rented homes still fail to meet the Decent Homes Standard and inefficient heating remains a particular problem for private tenants.

 

While the EHS can tell us much about these challenges, it is important to also consider the gaps in what it tells us about young people's housing circumstances. A key issue here relates to the way the survey is designed. Because the EHS is a household survey which interviews one 'Household Reference Person' per household, it tells us relatively little about young people who are not heads of household but are instead sharing or living in the parental home.

Given that trends in the housing system are known to affect when different young people form households, we also need to examine data gathered from individuals to better understand 'concealed' changes in young people's living arrangements. This is a central objective of this project and one which I will explore further in subsequent blogs.

 

Posted 29/02/16