According to the Resolution Foundation, fewer home owners and rising costs in the private rental sector mean that millennials will have spent £44,0000 more in rent by the time they reach 30 compared to baby boomers.
The analysis, published ahead of the launch of the Resolution Foundation’s flagship Intergenerational Commission on Monday, highlights an alarming drop in home ownership over recent decades that has reduced living standards for the young and led to a further concentration of wealth among the old.
The analysis shows that baby boomers – those born between 1946 and 1965 – were the main beneficiaries of the growth in home ownership over the 20th century, with close to two-thirds (63 per cent) owning their own home by the age of 30. However decades of falling housebuilding and rising house prices have reduced home ownership for subsequent generations. Around 60 per cent of generation X owned their home by the age of 30, falling to 42 per cent of today’s millennial generation.
This shift away from home ownership has left many more millennials renting privately and has coincided with a sharp increase in the cost of renting. The analysis finds that millennials spend almost twice as much on rent as genXers did at the same age, who in turn spent twice as much as the baby boomers before them.
Combining the downward shift in home ownership with the rising cost of renting, the analysis finds that millennials have spent £44,000 more on rent than the baby boomers by the time they reach 30, and £25,000 more than generation X.
The Foundation says that the extra spending on rent has reduced young people’s living standards and made it harder to save for a deposit for a house. It notes that that the extra spending on rent is more than the average deposit for a first-time buyer today of £33,000.
With half of all non-commercial or institutional rental income going to baby boomers, the Foundation says that the growth of generation rent is a key reason why questions of intergenerational fairness are rising up the national agenda.
The Foundation welcomes Theresa May’s acknowledgement of Britain’s ‘housing deficit’ in a speech earlier this week, where she said that unless action is taken “young people will find it even harder to afford their own home.”
It says that a major housebuilding programme is likely to find support across the generations, contrary to popular perception, and points to findings in the British Social Attitudes Survey that baby boomers’ support for homes being built in their local area has almost doubled in recent years, from 29 per cent in 2010 to 56 per cent in 2014.
The analysis is published ahead of the launch of the Intergenerational Commission, an 18-month investigation that seeks to repair the fractured social contract between generations. It will consider the extent to which the living standards of young people today have been permanently scarred and recommend policies to raise the living standards of current and future generations.
The Commission’s members are: Vidhya Alakeson (Power to Change), Dame Kate Barker (ex-Bank of England), Torsten Bell (Resolution Foundation), Carolyn Fairbairn (CBI), Lord Geoffrey Filkin (Centre for Ageing Better), Sir John Hills (LSE), Paul Johnson (IFS), Sarah O’Connor (Financial Times), Frances O’Grady (TUC), Ben Page (Ipsos MORI), David Willetts (Commission Chair and Resolution Foundation) and Nigel Wilson (Legal & General).
Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said:
“The nation’s housing crisis is perhaps the most visible example of growing inequality between generations.
“Young people today are paying a heavy price for decades of falling home ownership. The struggle to get on the housing ladder has left many of today’s millennials renting, at a time when it has become more expensive to do so. Millennials have had to spend £44,000 more on rent by the time they reach 30 compared to the baby boomers.
“Britain’s continuing failure to build enough homes means that unless we change course the struggle of young people to own their home is only going to get worse.
“The good news is that older generations are just as concerned about young people’s struggle to own their home, and support for housebuilding is growing across all age groups. A sustained programme of housebuilding to cut Britain’s ‘housing deficit’ would send out a clear message from the incoming Prime Minister that she is committed to repairing the social contract between generations.”
Rental income across generations
|Mean annual rental income||Mean annual rental income among landlords||Number of landlords||Share of all landlords by generation||Total rental income||Share of all rental income|
|Silent (and earlier)||£180||£7,200||220,000||23%||£1,560,000,000||20%|
Source: Family Resources Survey
- The millennials are aged between 15 and 35. Generation Xers are aged between 35 and 50 and the baby boomers are aged between 50 and 70.
- The Commission will be officially launched at an event with David Willetts, Frances O’Grady, Carolyn Fairbairn and Ben Page on Monday 18 July at the Skyloft in Millbank.
- In her leadership speech on Monday Theresa May said: “Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced. And more and more of the country’s money will go into expensive housing instead of more productive investments that generate more economic growth.”
- Halifax Building Society estimate that the average first time buyer deposit was £33,000 in 2016.
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”