Up to a third of millennials ‘will never own a home’, report finds

A think-tank has called on policy makers to radically reform the private rental sector to make it fit for raising children and retirement after a new report found that a generation of young people face the prospect of never owning their own home.

Published today by the Resolution Foundation, Home Improvements sets out a blueprint for tackling Britain’s housing crisis including tax reforms to discourage multiple home ownership and better support home ownership among the young.

It also calls for more support for councils to get more affordable homes built.

The Foundation argues that more should be done to build homes and support young people’s home ownership aspirations. However, it also warns that policy makers cannot afford to neglect a crucial part of Britain’s ‘here and now’ housing crisis – poor quality and insecurity in the private rented sector (PRS).

The think-tank said there had been a boom in private renting, with four in 10 millennials – roughly defined as those born between 1980 and 2000 – living in rented accommodation at the age of 30 across the UK. This is four times the rate of their baby boomer parents at the same age.

If home ownership growth follows the weak pattern of the 2000s, the think-tank argues, then up to half of millennials will be renting in their 40s. One-third could still be renting by the time they claim their pensions.

Meanwhile, 29% of millennials still share a home either with their parents or flatmates at the age of 30. The Foundation said the hike in retiree renters – combined with an ageing population – could more than double the housing benefit bill for pensioners to £16 billion by 2060.

It called on the rest of the UK to follow Scotland’s lead by ushering in an end to fixed-term rentals, making leases openended. Changes brought into force in Scotland last year gave tenants greater protections, ensuring rent increases can only be made every 12 months. A specialist tribunal was also set up, providing a route for landlords and tenants to settle disputes.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt – paying a record share of their income on housing in return for living in smaller, rented accommodation.

“While there have been some steps recently to support housebuilding and first time buyers, up to a third of millennials still face the prospect of renting from cradle to grave.

“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation. That means raising standards and reducing the risks associating with renting through tenancy reform and light touch rent stabilisation.

“For any housing strategy to be relevant and effective for people of all ages, it must include this combination of support for renters, first time buyers and ultimately a level of housebuilding that matches what the country needs.”

Scottish Labour’s housing spokeswoman, Pauline McNeill, said the new report “will come as no surprise to the thousands of young people unable to get a foot on the housing ladder”.

A Scottish Government spokesman added: “This report notes Scotland has taken the lead in this area within the UK, with the introduction of the new private residential tenancy, which is the most significant change in private renting for almost 30 years.”

Share icon
Share this article: