A think tank has claimed that the UK housing crisis will soon become a “fertility crisis”, with more young people putting off having children in favour of saving for a deposit.
According to research from the Adam Smith Institute (ASI), the last 10 years has seen a “collapse” in home ownership among young people. The research states that in 2004, there was 60% home ownership among 25-43 year olds, “the key childbearing demographic”, a figure which had fallen to just 35% by 2014.
“The housing crisis is a well-known immediate economic problem, but this report showcases how it is wrecking the lives of the people of this country, preventing them from having the children they want to have," said Andrew Sabinsky, an independent researcher and author of the report.
It is certainly true that home ownership is now a far less realistic option for many young people in the UK. According to the UK House Price Index (HPI), released by HM Land Registry, the average property value in the UK had risen to £218,255 in January 2017.
This is all the more alarming when compared to figures from RightMove on average property prices in London.
“London, with an overall average price of £594,202 was more expensive than nearby South East (£381,955), East of England (£319,218) and East Midlands (£196,865),” the website reads. “The priciest area within London was Central London (£1,729,897) and the least expensive was East London (£445,922).”
The concept of an ‘ageing population’ is also well known, with fewer births and increased life expectancies leading to increased pressure on the young to support the old. This is already happening in a number of wealthier economies across the world, including the UK.
Putting the situation bluntly, the ASI report claims that we are sitting on a “demographic time bomb”.
It can be difficult to take this perspective when viewing property price growth in a short term context. Recent figures by Halifax, for example, state that house price growth in the UK actually dropped by 0.1% in June 2017, while annual growth fell to a four-year-low at 2.6%.
This new report focuses on predicting long-term impact, however. It even claims that “approximately” 157,000 children were not born in the UK from 1996-2016, “compared to if housing had not become more unaffordable.”
"This private tragedy will, in the long-run, entail massive knock-on costs to public finances,” Sabinsky continues. “Housing market liberalisation is something the Government should do anyway, but this report outlines a new set of pressing reasons for it to act.”
Philip knows the most frustrating aspect of a home improvement job is not knowing anything about it! In the news, Phil is always on the look out for properties that inspire. He’s a fan of modern properties, with a particular soft spot for skyscrapers.