A new report has a gloomy outlook on housing prospects for 20- and 30-somethings – but it also suggests some solutions.
One in three millennials in Britain will never own their own home, according to a new report by independent think tank the Resolution Foundation.
The report, published on Tuesday morning, looked at the future housing prospects of approximately 14 million 20- to 35-year-olds and drew distinctly gloomy conclusions. It said that many millennials will be forced to live and raise families in insecure privately rented accommodation for their entire lives, with around half of that generation predicted to still be renting in their 40s. A third of millennials may still be in rented accommodation by the time they reach pensionable age.
The think tank’s intergenerational commission is now calling on the government to introduce “indeterminate” tenancy agreements as the only form of rental contract in England and Wales, replacing the six- or 12-month contracts currently used by most landlords. It said that open-ended tenancies would provide millennials with more stability, which will be particularly important as more people in that generation begin to start their own families.
“While insecurity in the private rented sector is often seen as an acceptable risk when childless, the disruption it can cause to schooling, friendship groups and support networks once young people have a family is clearly less than ideal,” the think tank said.
Open-ended tenancies are already the norm in European countries including Germany, Switzerland, the Netherlands and Sweden, and were introduced for renters in Scotland in 2017.
These contracts mean that renting is not seen as a risky option for families in those countries, with people often renting the same property for many years or even most of their lives. Most tenancies in Germany are indefinite and last 11 years on average, compared to 2.5 years in the UK.
The Independent notes that many of those countries also have much stronger tenants’ rights than the UK, where renters can usually be kicked out by landlords with just two months’ notice.
The Resolution Foundation is also calling for the introduction of a three-year cap on rent increases, which would not be allowed to rise by more than the consumer price index, and for the government to tax foreign investors in rented property more heavily.
“Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt,” said Lindsay Judge, senior policy analyst at the Resolution Foundation.
“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 associated with renting through tenancy reform and light touch rent stabilisation.”
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