Is Britain becoming ‘Generation Rent?

generation rent

Latest census figures prove beyond question what many housing charities have been saying for years. There is a drastic housing shortage in Great Britain. The crisis has been caused by the failure of successive governments to add to the housing supply, which has pushed the prices of existing stock sky-high. The chronic situation is exacerbated by a growth in population and a generation of young people unable to afford to leave home. Whilst typically the number of new households should increase by between 8% and 13%, last year it was only 7.5%, making it the second lowest in 100 years. Meanwhile, the population has surged up to 56.1 million. We are facing a future where the prospect of ever owning your own home is becoming a distant dream.

Adults Still Living with Parents

The Office of National Statistics has found that between 1997 and 2011 there has been a 20% increase in the number of young people, sometimes called “boomerang kids”, who have no choice after graduation but to move back in with their parents. Last year saw three million fall into this category. In this far from ideal scenario, high rents make independence impossible, while the prospect of ever saving enough for a deposit is daunting. The average income for a homebuyer topped £40,510 in June 2013, which is a sign of the affluent taking advantage of the slight recovery in the housing market. It is no consolation to the young, who are either struggling to find work or coping on a low income. It certainly outstrips inflation and average weekly earnings. The average house price is now £228,405, up by 4.5% from a month earlier. In this ever-escalating cost spiral, what is the government doing to fix the mess?

Help to Buy Scheme

The coalition government insists that its Affordable Homes Programme has got off to a flying start and is making a radical difference. Grant Shapps, the Housing Minister, has said, “We are confidently on track to deliver 170,000 new homes by September 2015”.

However, industry analysts are sceptical. On closer examination of the figures, a shocking 454 affordable homes were started between April and September of 2011, followed by 15,269 in the next six months, a figure that is still 64% down on that of the Labour government’s in 2009/10. With at least 250,000 new households being created every year, it is clear that this is merely the tip of the iceberg. Housing campaign group Shelter called the figures “depressing”. At this rate, a shortage of more than a million homes is anticipated by 2022. The Joseph Rowntree Foundation, among others, is calling for an “urban renaissance”. Without drastic steps, homelessness is bound to soar, public-sector workers face eviction as they are priced out of the housing market and the poorest families are stuck on the huge waiting lists of housing associations and local authority providers. Private rents continue to rise and tenants eviction is another serious issue as people who cannot afford to buy are faced with the threat of losing their homes.

Debt and Repossession

Sadly, many existing homeowners are no longer able to keep up with their mortgage repayments, causing yet another wave of problems. Shelter’s interactive map of repossession and tenants eviction hotspots shows an alarming spread across the entire country of badly affected areas. Losing their home is one of the worst outcomes that any family can face. The figures are based on repossession claims issued by mortgage lenders and landlords. Shockingly, they show that one in every 115 homes is in danger of repossession or tenants being evicted. It is a tragic story and one that needs a great deal of investment and new building if it is to have any prospect of ending happily.

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