Theresa May could be entirely correct. Britain’s real estate market is severely dysfunctional and needs to be reformed. Homeownership for millennials has collapsed over the past three decades; the investigation reveals that millennials are facing a housing crisis from London to Manchester.
The homeownership rate for millennials aged 25- to 34-year-old has nearly halved in some regions of Britain, showing that the housing affordability crisis extends far beyond the boundaries of London.
According to The Guardian, the report was conducted over a two-year investigation of “intergenerational fairness in Britain,” supervised by think tank Resolution Foundation and directed by former universities minister David Willetts. The team discovered that overpriced homes in Britain had forced millennials into “increasingly cramped and expensive rented properties that leave them with a longer commute and little chance of saving for a home.”
The figures below show how a collapsing homeownership rate for millennials is much more widespread than thought:
“Ownership among 25- to 34-year-olds has plummeted in Greater Manchester from 53% in 1984 to 26% last year. It has fallen from 54% to 25% in south Yorkshire, from 45% to 20% in the West Midlands, from 50% to 28% in Wales and from 55% to 27% in the south-east. In outer London, the proportion has collapsed from 53% to just 16%. Out of 22 regions analysed by the commission, in only one – Strathclyde in Scotland – has home ownership among the young remained stable. It stood at 32% in 1984 and 33% last year, having peaked at 45% in 2002.”
Shockingly, with today’s sub-par economic growth conditions in the region, millennials are expected to be at the same level of homeownership as the previous generation by the age of 45. The Guardian notes that inheritances could speed up the home buying process, but added that “nearly half of young non-homeowners have parents who do not own either.”
Nearly two-fifths of millennials rent by the age of 30, double the rate for Generation X, and almost four times the rate for baby boomers. It was estimated that millennials spend roughly a quarter of their net income on housing, which is three times more than the pre-war generation.