Young People, Tenure Choices and Inequality

I’ve spent today writing a presentation for a conference on Friday about Housing in Scotland.  I’m tasked with covering the issues facing young people in the housing market.  Yet my gut reaction is that we can’t understand the complexity of issues at play if we only look at ‘the market’.  I suppose this reflects my dissatisfaction with the way in which economists think about ‘choice’ in terms of how people negotiate the housing market.  For me, choice is a fallacy because societal structures ultimately shape and construct the ‘decisions’ individuals and households make – focusing on the rational decison making process fails to get to grips with this.  To fully grasp the issues at play we need to get beyond the immediate housing issues and think about the interplay between housing and other social and economic policies, and also demographic issues.   Housing has been central to individual and national wealth in the post-war period,  It has also assumed a pivotal role in more recent societal shifts from collective to asset-based welfare provisions.  This involves individuals assuming more responsibility for their own future well-being, thus reducing the burden upon the state.

It strikes me that housing has been and will continue to be fundamental to patterns of social inequality both within and across generations.  It is now extremely difficult for young people to purchase a home in the UK without drawing on financial support from their family.  Where however does this leave those young people who are the children of renters? Is homeownership now further reinforcing existing patterns of wealth and inheritance?   Given our ageing population and shift towards ‘asset-based welfare’ it also remains to be seen whether house-rich older generation are able to (and want to) leave an inheritance to their children and grand-children. The growing expectation from government that we should use our housing assets to secure our own future welfare (i.e. to fund social care in old age, or to top-up our meager state pensions) means they may need their housing assets in their own old age.  Again this raises questions about how the current cohort of young people are supposed to secure their own future welfare if they are being denied access (or are having a delayed entry) to the housing ladder.

These dilemmas highlight the crucial importance of this public policy issue, and it is one which I am lucky enough to be able to investigate and unpack over the next few years.  The Leverhulme Foundation have funded my colleagues and I to conduct a three year, inter-disciplinary project to investigate the role of housing wealth in creating inter-generational inequalities.  The project involves St Andrews, Birmingham and Durham Universities and is led by Dr Beverley Searle at St Andrews.  The workstream which I am leading focuses on the issues mentioned above in terms of young people, tenure choice and future welfare.  I look forward to being able to report some empirical results in the years ahead.


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