LONDON (Thomson Reuters Foundation) - Britain’s young families pay more to live in smaller homes, further from jobs and with less security than their parents’ generation, who instead reap profits from the country’s housing shortage, according to a report released Wednesday.
Today’s 30-year-olds spend a record share of their income - almost a quarter - on housing costs, according to the study by British think tank The Resolution Foundation, which analyzed more than 50 years of data.
The report compared different generations’ experiences of housing and found that a half-century of mounting rents and property prices in Britain has drained the living standards of millennials, while enriching older homeowners.
Those aged between 25 and 34 are half as likely to own their home as their parents were at the same age, and spend on average six percent more of their income on housing, the report said.
“Britain’s housing catastrophe has been 50 years in the making but while its effects are widespread it is millennials who are truly at the sharp end,” said Lindsay Judge, senior policy analyst at the Resolution Foundation.
“The big danger today is that young people are having to settle for lower quality, longer commutes and less security in order to afford a place to live, despite spending a record share of their income of housing,” Judge said in a statement.
Britain’s restrictive planning regulations, along with steadily rising demand from new households, foreign investment and years of rampant property speculation, have kept the housing market on a tear for the past two decades.
Average British house prices have more than doubled in the past two decades, and more than quadrupled in London. But average wages have risen by only a fraction of that amount.
Despite a slowdown in price increases in the capital amid economic uncertainty following Britain’s decision to leave the European Union, house prices nationwide are expected to keep pace with inflation, according to a Reuters poll in August.
The Resolution Foundation urged political leaders to take radical steps to fix Britain’s chronic housing shortage, including greater state involvement in house-building and backing longer-term tenancy agreements.
While individual housing costs have increased for everyone, a record proportion of older Britons own homes, which has boosted their wealth and income in later life, the report said.
The baby boomers - the generation born in the two decades after World War Two - have been the biggest beneficiaries.
Millennials are forced to settle for homes that are 4 percent smaller than in 1996 and spend longer commuting.
The report predicted the average millennial will spend an extra 64 hours a year traveling to work by the age of 40, compared to baby boomers.
Reporting by Matthew Ponsford, Editing by Ros Russell.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit news.trust.org