Housing crisis preventing younger couples from expanding families?
Facts are stranger than fiction, and the ongoing housing crisis in London seems to be caught in a vortex! The latest research study contended that spiralling prices of houses in the UK was preventing young couples from having kids.
The reasons behind this are economic factors, such as affordability and the long wait to climb up the housing ladder, as younger couples aspire to own houses before expanding their families.
The research paper published by Adam Smith Institute blames the “housing crisis” for “fertility crisis” among the younger married couples. The research scholars have argued that rising house prices may have positive effects on fertility for existing homeowners, but also have strong negative effects on fertility amongst renters and first-time buyers.
It is well-established that in little more than a decade, home ownership rates have collapsed among young people, as house prices and rents continue to rise. “If current trends are maintained we may expect fertility to fall even further,” the research paper contended.
According to the research paper, the economics of the UK housing market affect fertility in several ways:
• Rising rents typically cut fertility amongst renters.
• Rising house prices probably raise fertility among existing homeowners, as it gives them greater confidence that they will be able to afford another child.
• Moving to a larger property probably has a positive causal effect on fertility, though most of the correlation between moving to a larger property and fertility is noncausal and is explained by selective moves.
The research scholars have suggested free-market reforms to housing regulations, as they could help raise fertility and improve the country’s long-term economic and social prospects.
These findings provide a completely fresh perspective to the problems faced by prospective house buyers, especially younger first-time home buyers in the housing market. Last year, it was established that younger couples were being forced out of the City centre in view of the rising rents and prices of new homes. Many of the younger couples are relying extensively on their parents (bank of Mum & Dad) for deposits to buy homes. Now, this latest study on “fertility crisis” will only increase the pressure on the housing stakeholders to speed up the delivery of new homes apart from making them affordable.
Property companies, such as Strawberry Star, have already foreseen such serious concerns of first-time buyers. Consequently, we are evolving housing schemes to offer residential property at lower capital values, especially for first-time buyers in London. Technology, such as modular construction and prefabricated homes, could be considered by developers to reduce the delivery time and cost of construction.
The findings of Adam Smith Institute do not come as a surprise, as the impact of the UK housing crisis is being felt on all sections of society. The stakeholders of the housing sectors should take note of these developments and address the issue from the long-term perspective.
Source: Research by Andrew Sabisky