Millennials continue to bear the brunt of Britain's Housing Crisis, and the situation is only set to get worse. Cut them a break, says Renew's Gwen Jones.
Consigned to snowflake-dom by wider society, it’s fair to say Millennials - devotees to Love Island, Instagram aficionados and partial to a good Monzo account - are often tarnished with a fairly unflattering brush.
Branded complainers and hopeless hedonists; ignorant of the unrivalled luxury their parents’ generation worked so bloody hard to provide them with. Ah, if only it were so simple. Scratch beneath the surface of the stereotype and it becomes a lot more difficult to dismiss the plight of today’s twenty-somethings as mere toys being thrown out of the pram.
As it turns out, Millennials really do have something to complain about - that’s according to this week’s news. The headline? At least 630,000 20-30 year olds are likely to find themselves homeless upon retirement, having been denied access to the property ladder for the duration of their working lives. Basically, it’s another kick in the balls for ‘Generation Rent’ - a bitter pill to swallow for a cohort brought up being told to follow their dreams.
Dream indeed - of a two-storey semi-detached in the suburbs (picket fence optional). Except that for hoards of today’s young people, the image of traditional idyll in the ‘burbs will forever remain just that.
According to a recent government inquiry, hundreds of thousands of millennials are facing an “inevitable catastrophe” of homelessness upon retirement. On average, those in privately-rented accomodation (many of whom are young) pay 40% of their earnings in rent. Sound hefty? Try doubling it. Incomes typically fall by around half in retirement, and for those still renting in their 60s and 70s, rent rates practicable at working age quickly become unaffordable.
While there’s no telling what the property market will look like in a couple of decades’ time, it’s hardly difficult to imagine a scenario where rents continue to rise at a rate which outstrips or keeps pace with wage growth. If this does turn out to be the case, 52% of pensioners will be spending more than 40% of their income on rent by 2038.
From this point onwards, the outlook starts looking pretty bleak; for those unable to afford rent at market rates, it’s a choice between homelessness or temporary accommodation (which comes at great cost to the state).
According to Richard Best, chair of the all-party parliamentary group on housing and care for older people, “The number of households in the private rented sector headed by someone aged over 64 will more than treble over the next 25 to 30 years.” And, unless an additional 21,000 affordable homes are built per year within the same time frame, there simply won’t be anywhere for these people to go. “The consequence is bound to be homelessness for some.”
The same research also found that the number of eldery households living in poor quality or unsuitable housing could rocket from 56,000 to 188,000 over the next 20 years, and to 236,500 in the ten years after that. This is bad news for the millennial generation, the pensioners of tomorrow - substandard housing is already known to cause tens of thousands of elderly deaths every year.
A sorry forecast indeed. They say a man’s house is his castle - so where does that leave us?
Jobs are no longer a route out of poverty:
Getting into work is the best route out of poverty for families in the UK. At least, that’s the line the British government takes.
The cabinet seems very proud of the fact that the national employment rate, currently 74%, is at its highest ever and unemployment, at just 5%, is at a near-historical low. As of April this year, minimum wage for workers aged 25 and over stands at £8.21 per hour, up from £6.19 at the end of 2012. At first glance, you might think that these glad tidings mean that there are now fewer poor people in the UK. We live in complex times, however, and it’s unwise to take the Tory’s self-affirmations at face value.
More Britons might be working than ever before, but the rate of absolute poverty in the UK has been steadily climbing over the past ten years after housing payments are taken into account. Rough sleeping has soared by a whopping 165% since 2010. Life expectancy has stagnated, and millions of children are going to school hungry every day - and numbers continue to rise. There are now 2000 food banks across the UK, having sprung up in their thousands after the financial crisis (before which there were just 29).
Not least, the composition of households living below the breadline has changed for the worse. A decade or so ago, the number of poor people living in ‘working’ households was 40%. Today, it’s over half. Most disquieting is the effect of this change on children - nearly 3 million children from working families are now living in absolute poverty.
Of course, it’s not all doom and gloom. Pensioners, for example, a group largely shielded from cuts, have seen a huge decrease in levels of deprivation - the number of pensioners living in absolute poverty has fallen from 50% in the early 90s to just 15%, thanks to welfare benefits and a generous state pension which is adjusted for inflation. The numbers of people in work also shouldn’t be dismissed entirely; anxiety levels are down and general wellbeing in the UK is up, which can likely be attested to increased pervasiveness of stable employment.
But Britain’s workers really are struggling, and Britain’s experience shows that being in work is not always enough to keep afloat. Austerity has hit working families hard, and benefit cuts have left thousands struggling to stay above the breadline. Working families with small children have recently seen their child benefits frozen and working tax credits unpegged from inflation, now rising at only 1% per year.
It’s not just the government’s austerity programme that’s to blame, however; after all, as numbers of working poor have risen, many un-working families have been lifted out of poverty. Housing prices are an obvious culprit - since 2009, the average cost of a home in Britain has increased by 10% in real terms. Londoners are some of the hardest hit by the housing crisis, spending a third of their disposable income on rent.
Changes to the labour market have also damaged worker’s long-term employment prospects. Full time work is increasingly scarce, and more and more people are trapped in unstable, part time or temporary jobs. This issue hits those at the bottom end of the labour market, whose skills are typically least in demand, disproportionately hard and many do not work enough hours to make a living wage. The IFS estimates the number of workers in the bottom quarter of the income spectrum in relative poverty as 21%.
The logic behind Conservative welfare reforms has been based on incentivising people to get into work. The centre-left is equally guilty; Clinton’s benefit cuts were aimed at tackling dependency culture and promoting personal autonomy. Blair’s ethos was largely the same - encourage people find work, and stay there. The above presents a challenge to the intellectual basis these types of reform.
Jobs simply aren’t doing enough to keep people out of poverty. With burgeoning housing costs and a skittish labour market, low-paid workers with volatile incomes are in need of a safety net, as well as a job. Universal credit in its current incarnation (which involves a five week wait period before claimants receive their payments) is a meager exacerbating the problem, rather than healing it. In this kind of climate, it is essential that social policy focuses on more than just employment.