Millennials Struggle with Homeownership in the UK
Millennials in the UK face big challenges in owning homes. Those born in the mid-1990s have only a 25% chance of owning a home. This is a sharp drop compared to earlier generations. People in their twenties during the 1990s were nearly twice as likely to own property.
Several key factors drive this trend. Rising property prices have outpaced income growth for many years. Housing economist Paul Cheshire pointed out that house prices have risen much faster than other costs, like food. The UK government estimates that England needs an extra 300,000 homes each year to meet population demands and changing living needs. Last year, only 208,000 new homes were built.
Inflation has also played a key role in raising construction costs. Prices for raw materials like timber, steel, and concrete have soared, especially since the COVID-19 pandemic began. The war in Ukraine has made these costs worse, pushing energy prices up by 15% in just one year. The ongoing conflict in Iran has also added to rising prices in the construction sector. A shortage of skilled labor is another ongoing issue. Over 20% of construction firms report trouble hiring qualified workers.
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The challenges for millennials in the housing market will likely keep demand for rental properties high. This could affect rental prices. Investors should keep a close eye on the housing market, especially as inflation continues to impact construction costs and housing supply.
Watch for upcoming government housing policy announcements. These are aimed at addressing the housing shortage and rising costs.
Based on reporting by: bbc.co.uk, bbc.com