All over the EU, younger people are faced with a personal crisis: where to live. With skyrocketing rent prices, student debt and unending waits for social housing, more 15–35-year-olds are homeless than ever, and it most certainly isn’t their fault. So, who’s fault is it?
In 2022, Hellas estate agencies reported that over the last 12 months, rental rates increased by 12%, and in England, in 2024, rental rates increased by 8.8%. This is to show that rates continue to rise, and many younger generations are unable to cope. Halifax building society coined the term ‘Generation Rent’, which describes market conditions for first time buyers. In 2011, Generation Rent suggested that anyone age 20-35 had little to no chance of owning their own property within the next 5 years. This evidence showcases the struggles of younger generations and the modern struggles to find affordable housing, let alone get onto the property ladder. However, this does not answer the question: why? A housing crisis does not simply happen, so why did it happen? Perhaps more aptly, who let it happen?
Many factors contribute to rising rental rates, each playing a role in the housing crisis. While it’s easy to place blame on any one factor, determining which is the most significant or sole cause is complex and a different question.
Firstly, financial crisis resulted in the reduced flow of ‘quick money’, meaning less were able to buy houses due to the unavailability of mortgages. This led to higher demand. As demand grows, the rental buildings increase in value and therefore the price is upped. Due to this, the increasing rental rates that mean the youth cannot afford to rent can be traced back to financial crises as far back as 2010.
On the other hand, student debt could be a root cause of the struggle to get onto the property ladder. This occurs because lenders look at the debt-to-income ratio to determine the risk in loaning money (the money that would be used to help in buying property). However, with a student debt, the debt-to-income ratio is impacted, and the credit score is lowered, meaning that a young person with student debt is less likely to be offered a loan to assist with getting on the property ladder. Furthermore, thought the increasing interest rates on student debts do not directly affect the ability to buy property, they result in the young person accumulating a higher debt, and therefore making rent, let alone property less affordable. Nonetheless, if the student loan was to be paid back in efficient time, it can benefit the credit score, meaning, if anything, they’d find it easier to get a mortgage, and for this reason, student debt cannot be named the sole blame of the youth housing crisis.
The current state of social housing could be argued to be a primary issue as the scheme is intended to be a solution to the housing crisis all over Europe, offering affordable housing for people in a certain tax bracket. However, as seen in the 1.3 million household waiting list in England alone, social housing is not fit to accommodate all the people it is intended to protect, meaning many people – not only youths – find themselves homeless, or in houses unfit for living in – because there is not available social housing. Using England as an example could be considered an inaccurate representation however as, after Margaret Thatcher’s Right to Buy scheme, hundreds of thousands of social housings were sold off, meaning there is currently less social housing overall, so there will undeniably be less available. Nevertheless, it can be seen EU-wide that young people are not prioritised for social housing and are therefore highly impacted by the minimal number of houses, leaving them much more likely to face homelessness.
In conclusion, though certain failures in social housing, and the detriments of student debts and credit scores are factors in the inability for young people to house themselves, the root of the cause is, in the end, the economy, as shown through the constantly rising rent, interest rates and the Right to Buy scheme.
Salma, EUobserver
