We carried out workshops and focus groups in Manchester, speaking to young people about the current housing market, and their innovative ideas for overcoming the barriers to homeownership. We also carried out a nation-wide poll, to understand how the challenges people face in Manchester fit into the wider UK context.
The result of this research has been the Making Home report.
The message of this detailed document has been clear: young people want more modern housing options. Hannah Webster, senior researcher at the RSA, wrote a blog post, summarising the key points from the research, and the report. Here are four things we learned:
‘Affordable housing’ isn’t affordable for young people.
The current definition of ‘affordable housing’ is that rent should be no more than 80% of the market price in the area. The simple fact is this isn’t actually affordable for young people.
According to our poll, a third of young renters in England – and almost half in Greater Manchester – have had to cut back on food, drink or other activities in order to cover their housing costs. Others reported taking on a second job, taking out loans or living somewhere unsuitable or unsafe.
The housing market is making young people feel insecure
The RSA talks about an idea called ‘economic insecurity’, which they define as the confidence an individual has that they will have enough money to get by in future, or if that feels fragile. For young people, housing is an important part of their sense of economic security.
Security in housing, money, and relationships are all are interconnected. For example, having to pay a deposit on a new flat before you get the old one back can cause money problems. This can put a strain on relationships. If a relationship breaks up, someone might have to move.
But insecurity goes beyond private renting. If you own your house, but have stretched yourself to buy, you might be worried about any surprise bills. If you’ve moved to a cheaper area to buy, you might not feel physically safe.
More generally, a lot of young people just feel like they don’t have a lot of choice. These connecting feelings of not being ‘secure’ makes life feel precarious for too many young people.
Housing hasn’t kept up with the changing world of work
At the centre of these feelings of insecurity is modern work. The increasingly flexible way we work – from fixed-term contracts and probation periods to self-employment and the gig economy – has fundamentally changed how we earn money. But how we rent or get a mortgage hasn’t kept pace with this change.
In particular, modern working makes it harder to document and predict income. Even though a gig economy worker might be earning more than enough for the housing they want, they’ll struggle to prove it to a landlord or mortgage provider.
Credit can also be an issue locking young people out. Relying on debt is more common than ever, but it can be a barrier to rental contracts. If you’re on Universal Credit, you may be simply blacklisted from a lot of prospective homes.
We need more options than just renting or buying
Our survey showed young people still want to own, and half wanted to do so in the next five years. But this is less and less likely to be a reality.
We need new and creative ideas. One idea that came out of our conversations with young people in Manchester is ‘Escalator Ownership’. Escalator Ownership combines two existing housing models:
In Escalator Ownership, you would start paying a ‘Rent to Buy’ style reduced rent, to allow you to save, and owning 0% of a home.
Then, you could start to buy a percentage of your home and pay rent on the rest like Shared Ownership.
The flexibility of this innovative combination allows individuals to move at a pace that works for them, accumulating ownership from one percent at a time, whilst security is supported through the long-term commitment.
This is just one of the ideas young people helped us to create. If we’re going to solve the housing crisis for young people, the first building block is to listen to them. And their voice is clear – they need more options.
The research was launched at a panel event, attended by housing providers, education, private rent and political representatives, and young people. Watch our video to find out what the different panellist had to say about the final research report, and their recommendations for how we turn this research into action.