Last week chair of the Resolution Foundation and former minister David Willetts called for ‘bold measures’ to address the challenges faced by the younger generation and pointed to ‘the seismic risk to the contract between the generations if we do not act.’
He highlighted that the younger generation are spending a record share of their income on housing – many in the private rental market – with few affording to buy, even with the increasing availability of shared ownership schemes.
Housing, or rather the lack of affordable housing for young people, is a concern to all generations, surveys suggest. Ipsos MORI found that 79% of adults agree that even if today’s young people work hard and get good jobs, they will have a hard time getting the right housing. Another recent global poll showed Britain to be the country least likely to think younger people will have a better chance of owning their own home than their parents.
And yet the debate is often characterised by the notion that an older generation of home owners are house blocking by sitting on assets and not selling up and “downsizing”.
Framing the issue in this way leads to misguided policy responses.
Firstly, it assumes that older home owners want to move to smaller properties but are prevented from doing so because of the costs of moving. In a recent survey of people over 55 who had moved, only 39% downsized. The majority moved to a house the same size or bigger. One of the key reasons for moving was the better state of repair and the suitability of the new property, rather than financial incentives. Decision-makers often overlook the very strong role emotional attachment plays – not wanting to leave the home where you lived when you were first married, raised your kids or have lived for 20 years, as well as the nightmare of clearing out the loft/cellar/spare room.
Secondly, it assumes that younger generations would be in a position to buy the homes vacated by the downsizing baby boomers. Many of these homes are simply not affordable for first time buyers. Even if they were affordable, they might not be where younger people want to live or need to live to access jobs.
Thirdly, it assumes that there is suitable alternative housing that older people want to move into in the area they already live, …