Ethan Shone 22nd January 2018
It would be nice to think that society is gradually moving forward and that, as time goes on, it gets easier and easier for the younger generation to do well.
But on moving out of home at least, the stats suggest otherwise. Of the 3.4 million people aged 20-34, 26% currently live in the family home, up from 21% in 1996, data from the Office for National Statistics (ONS) shows
You’ve no doubt heard this phenomenon being blamed on young people and a supposed love of avocados, “posh-coffee” or sandwiches. But is that really what’s stopping us moving out of home, or is it maybe something to do with falling wages, unstable employment, skyrocketing house prices, an out-of-control rental market and the unwillingness or inability of successive governments to increase the UK’s housing stock?
Probably the avocados, ey?
Of course, moving out young – particularly buying your own home – was far from a given for previous generations, but to ignore the substantial drop in the number of young people able to leave home would be to ignore one of the most significant societal shifts to have occurred in decades.
Baby Boomers were 50% more likely to own their own home at age 30 than millennials and, by age 27, 55% of Gen X’ers owned their own home, whereas for millennials the figure is 32%.
In recent years, both the rental and purchase markets have seen prices rise at a much higher rate than wages. Several factors affect this, but overall, it’s a supply and demand issue; not enough houses are being built – particularly affordable houses – so the cost of those that exist rises. This is particularly true in the south of England, but it’s far from unique to that part of the country.
After the Great Recession, it’s now also much harder to get a mortgage than it ever has been.
Men vs women
Interestingly, the data also shows that it’s young women who are getting out of the family home quicker than young men. In 1996, 27% of men aged 20-34 still lived at home, as did 15% of women, whereas today the figure has risen to 32% of men and 20% of women. When we think about the factors that have made it harder for young people to move out – housing market, falling wages etc – none of them stand out as having a difference in their effect depending on gender, so how do we explain the difference?
There might be different social expectations between genders about returning ‘home’ if relationships break down
Robert MacDonald of Monash University, Australia, attributes the difference between young men and young women to a number of potential factors.
“Young women now fare better in the labour market, in terms of income, in their 20s than do young men. They also tend to enter into partnerships/marriage slightly younger than do young men. As well as this, there might be different social expectations, to a degree, between genders about returning ‘home’ if relationships break down.”
Women between the age of 22 and 29 will typically earn £1,111 a year more than their male counterparts, according to ONS data from 2006 to 2013 — though it’s important to note that this reverses rather dramatically once workers reach their 30s. And women do tend to get married younger, with more ONS data showing that under 30, more women get married; typically to slightly older men.
Having left college at 18 and got an apprenticeship, Tom* didn’t have expectations to move out straight away, but now feels that it’s been more difficult to move out that he’d have thought.
“When I started work I wasn’t on much money, I was happy enough at home and none of my friends had started moving out yet. So, if you’d asked me then ‘do you want to move out’ I’m sure I’d have said yes, but I didn’t want to in a serious way.”
The people around me are all starting to buy their own homes and I’m more and more conscious of being 24 and still living at home, but it’s just not that easy to get out
But, now 24 and living with his parents and younger sister in East Yorkshire, Tom feels much more strongly about leaving the family home.
“Now I really would like to move out. The people around me are all starting to buy their own homes and I’m more and more conscious of being 24 and still living at home, but it’s just not that easy to get out.”
Tom has had four jobs in the last six years, his shortest time in a job was nine months, and his longest is with his current employer, where he’s been for almost three years. Until recently, Tom had worried that the instability potentially demonstrated by his working life might have harmed his chances of getting a mortgage, or even renting.
“I didn’t move around that much, I’d think it’s fairly typical for people who’ve just left education and are still working out what they want to do to change jobs a few times, but I know that not being able to show that I’d kept the same job for a long time would have really harmed my chances (of moving out).”
My credit history has already made getting a car difficult and even a phone contract, so who knows what effect it’ll have on a mortgage application
But job instability isn’t the only blight on Tom’s record that might make moving out difficult.
“When I was younger and I didn’t have much money toward the end of the month, I’d take out small payday loans. It’s not an excuse, but nobody really tells you how bad those loans can be. I missed a few payments and it started to quickly add up,” he says.
“I got into an amount of debt, which is now sorted, but that mark on my credit history has already made getting a car difficult and even a phone contract, so who knows what effect it’ll have on a mortgage application.”
Money money money
Tom’s situation is far from unique. The main problems for young people trying to move out are mostly money-related. If you’re trying to buy your first home, then not only do you need a sizeable deposit – usually in the region of 10%-20% — but you’re also going to have to demonstrate to a lender that you don’t pose any risk of defaulting on the mortgage. Since the financial crisis, lenders have become much more selective about who gets credit, and with young people being much more likely to be in unstable employment and without a strong credit history, it can be incredibly difficult to get a mortgage deal.
And, though different, there are plenty of obstacles to overcome to even make it onto the rental market for young people. In recent years, due to a mixture of factors, the private-rental sector has grown massively and with it rent has skyrocketed. Moving into rented accommodation typically means paying at least a month’s rent up front, plus a deposit and agency fees – and that’s before you’ve actually bought any furniture, as most rental properties now come unfurnished.
It will take years to catch up but that doesn’t mean the government shouldn’t try
Dominic Lipnicki is the director of Your Mortgage Decisions and an expert on all things housing. He sees credit and lending as being one of the key parts of this issue.
“The way lenders approach mortgages haven’t changed anywhere near enough to accommodate people who work in newer forms of employment. And yes, interest rates are low, but many young people can’t get access to that low-interest credit and that’s somewhere the government and the regulator could do a lot more, fairly quickly and fairly easily, to have some impact”
But Mr Lipnicki is quick to point out that to really address this problem will take action on a number of issues.
“On top of that, I think a range of policy, such as relaxing planning laws, preventing land banking and preventing developers from only building high-end housing would all make a difference, but the problem is that were so far behind.
“It will take years to catch up but that doesn’t mean the government shouldn’t try.”
The knowledge that he’s far from alone in this situation does little to dispel feelings of embarrassment and frustration for Tom though, and the difficulty with which he is likely to be able to leave home is, at times, demoralising.
“It’s difficult, because on one hand, you know it’s harder to move out than it has been, but it still feels like, by still living at home at this age, I’ve somehow failed.
“It’s not a nice feeling. Knowing that it’s going to be such a struggle to move out too, makes me feel even worse about it to be honest, sometimes it just feels hopeless.”
Ethan Shone 22nd January 2018