Why worry about house prices & homeownership?
In the last two decades, both house prices
and private home ownership have grown dramatically across Europe, transforming the role and meaning
of ‘home’. Although ratios vary, in 2015, over 71% of Europeans were homeowners, most
with little or no mortgage. For many, having most of their financial equity in their home
has increased feelings of security. However, the intensified commodification of the home
has undermined access to housing, enhanced debt and stimulated new patterns of inequality
and financial instability. Our study of family and property wealth, HOUWEL,
looks at the changing role of housing and homeownership in different European contexts
and its increasing centrality in investment, security and welfare strategies. While we have recently experienced a period
of widespread growth in homeownership, becoming an owner-occupier has actually become more
difficult, especially for younger people. Firstly, job conditions have gradually deteriorated
with the proportion of well-paid, stable jobs necessary for home purchase dwindling. Temporary
or part-time jobs have also become more common among young people. Before the financial crisis, easy access to
mortgage credit, allowed many people to buy their homes, despite diminishing labour security.
However, the crash of 2008, put an end to easy credit – a root cause of the crisis.
Added to this has been inconsistent state support, growing austerity, and uneven house
price recovery. OUR research has revealed stark reductions
in access to homeownership across many European countries, especially among younger cohorts.
Increasingly, the number of young people who have to stay on or return to the parental
home has grown dramatically. In many contexts, large increases in young people renting has
supported the idea of a ‘Generation Rent’. The flipside of ‘generation rent’ has
been a growth in the number and wealth of landlords, people who not only own their own
home but also someone else’s. The HOUWEL research has revealed recent breakdowns
in traditional housing ladders for many Europeans as well as growing socioeconomic inequalities.
On the one hand, the gap between generations has widened, as both job prospects and homeownership
access for young people have been undermined compared to those of their parents. On the
other, within younger cohorts the gap between those that have access to resources to enter
the housing market and those that don’t has also grown. Increasingly, whether or not your parents
are able to support you in buying a home determines your chances on the housing market. In the
UK, for example, nearly 75% of people aged 25-29 who entered homeownership in 2013 had
parental support. This is up from only 25% in 2005. Similar increases in generational
interdependence have also been seen in countries like Ireland, Italy and Spain, for example,
where family help was already well embedded in housing practices. Indeed, even in countries
associated with generational independence, like the Netherlands and Denmark, parental
support has become an integral part of mortgage practices and central to homeownership access.
But what does this increased interdependence between generations mean? How do people understand
giving and receiving support? In our study we examined five European country case studies
to answer these questions The key seems to be in the value placed on autonomy. North
European countries, like the UK and the Netherlands actively nurture the autonomy of young adults.
Financial support is relatively small and comes as a reward for personal efforts. In
countries like Italy or Romania, meanwhile, relationships are more clearly dependent.
Material support keeps children close, and even while some young people may feel trapped
in the ‘gilded cage’ of a new home provided by their family, others perceive support as
something they are entitled to. Diverging meanings of homeownership also influence
relationships between generations. While most Europeans prefer owning to renting, homeownership
is valued differently across Europe. While a Dutch or a British person may see buying
a house as a rite of passage and lifetime mortgage payments as quite normal, a Romanian
or an Italian might not see this as a desirable scenario and thus avoid it unless no other
option exists. So, while the investment and asset value of the house is paramount to a
typical British homeowner, a Romanian may focus more on the value of housing as secure
shelter, and property to pass on from one generation to another. So far government responses to shifting housing
and economic conditions have largely failed to grasp the centrality of home ownership
and dependency on it for meeting a variety of needs as well as growing inequalities between
and within generations. Our findings have, therefore, important policy implications and
reveal the growing importance of housing wealth to family relations, economic security and
welfare conditions across Europe.