Britains Millennial Generation
According to a report by the Resolution Foundation, one in three of British Millennials will never own their own home, many will be forced to live and raise families in insecure (and sometimes expensive) rented accommodation for their entire lives.
The Thinktanks commision has reported that half of the population in their 40s will be in rented accommodation and a third of these will be doing so by the time they are claiming their pensions. Its a gloomy outlook for 15 million millennials aged between 20-35 years old and it doesn’t look like letting up.
They are predicting by the time these millennials reach retirement age the housing benefit bill will be huge.
“This rising share of retiree renters, coupled with an ageing population, could more than double the housing benefit bill for pensioners from £6.3bn today to £16bn by 2060 – highlighting how everyone ultimately pays for failing to tackle Britain’s housing crisis,” the report read from The Guardian.
The report talks about a radical overhaul of the private rental sector in which they are proposing that there is a three-year rental cap on price increases. The cap will mean that the rent cannot be raised by more than the CPI (consumer price index) which is currently at 2.5%.
The idea of ‘indeterminate’ tenancies has been put forward by the Resolution Foundation. The idea behind these is that they would replace the current 6 month or 12-month tenancies that are currently in place. It would mirror how the Scottish do it with open-ended tenancies. This is also standard practice in Germany, Sweden and also Switzerland.
‘Greater security of tenancy is vital as more families are raised in the private rented sector’ the report advised. The number of privately renting households with children has tripled from 600,000 in 2003 to over 1.8m in 2016.
According to Scott from Home House Buyers “Another idea from Resolutions to help steady the rental market is also calling for the UK to tax foreign investors in rented property more heavily, similar to what happens in Vancouver in Canada and Australia, where external buyers face levies of up to 15%.”
It also sets outlines a number of possible suggestions to improve the supply of houses in the UK. Some of these reforms included giving local councils more powers to compulsorily acquire land and better access to finance to build affordable homes.
Lindsay Judge a senior policy analyst at thinktank, advised: “Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt. 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.”
As with everything in life, there are always two sides to a story and not everyone is in agreeance that the millennials have never had it so tough.
Some believe that the millennials housing crisis is a myth and a misconception. The unavoidable issue is the gap between property prices and incomes is at a historically high level and this cannot be argued against. Many see the problem is a whole generation beating themselves up and making more of a deal of it than they should. After all, it has never been easy to buy a house, has it?
There are more options available now than ever before with the help to buy scheme enabling buyers to put in just a 5% deposit for new build properties that are part of the scheme. Meaning the days of having to save up 30% deposits are in the past? Well, not quite. The Help to Buy scheme ends in 2019 so unless you are 19, have a deposit in hand, good credit and a secure job then you may just miss the boat.
So the verdict is still out and we will have to wait and to see if the gorvenment either extends the HtB scheme or looks to try another scheme to help the millennials get onto the ladder.