Europe is currently facing a “silent emergency” in its housing markets, according to one striking new report. The research by Habitat for Humanity , reveals the number of young adults living with their parents has rocketed to a record high.
The non-profit NGO, which aims to promote affordable housing worldwide, has cautioned that since the recession, many countries are facing a severe inequality in their property markets, with high costs and the number of adults forced to stay in their family homes suggesting that the overall crisis is not over.
The report reveals that in central and eastern Europe, households spend an average of 30 to 50 per cent of their income on winter heating alone, while rising costs are contributing to poverty. More than 10 per cent of Europeans spend more than half of their income on such costs,
Construction of properties has also plunged by up to 90 per cent, warns the study, with social housing not covering 10 per cent of people’s needs.
With low supply levels, rising cost and climbing prices, young adults have been prevented from being able to climb up onto the housing ladder. Indeed, the numebr of 18 to 34-year-olds now living with parents are at an all-time high, with 74 per cent of Slovenian young adults still living at home – the highest in the continent, followed by 66 per cent in Italy and 55 per cent in Portugal.
The group recommends innovative funding and lending options, as well as better use of modern construction technologies to reduce energy bills (and therefore housing costs faced by homeowners).
“Europe needs to look at better ways of developing and providing housing that helps people, regardless of class or income, to have a decent place to live,” Greg Foster, the Europe, Middle East and Africa manager of Habitat for Humanity, comments.
“And the trends and threats to Europe’s middle- and low-income neighbourhoods need to be analysed and solutions developed, to ensure the region’s cities remain liveable for everyone”.
Access to affordable homes is worst in Paris, Helsinki, Luxembourg, London, Amsterdam and Brussels, says the report. It also highlights the impact that treating property as an asset for profit has had upon wider housing markets.
“Housing becomes less affordable as market demand becomes heavily influenced by investment motives, which is illustrated by the evolution of house prices compared with GDP growth in most European countries,” say authors József Hegedüs and Vera Horvath.
The findings echo many problems find within the microcosm of the UK housing market, where homeownership is falling and prices continue to climb, due to a chronic lack of supply. Nonetheless, at a time when buying a property is not always possible, investment in real estate by landlords has also played a vital part in meeting demand for accommodation.
“Buy-to-let has made an important contribution to the expansion of the private rented sector, helping to reverse many decades of decline,” said the CML earlier this year, when cautioning about possible new cuts to landlord tax relief, which have since been announced by Chancellor George Osborne.
“The risk is that these changes and the threat of tighter BTL mortgage regulation will constrain the supply of available rental properties at a time when the fundamentals of population growth and low housing supply are driving an increase in demand,” added the IMLA in a separate report.