We’ve locked a generation out of adulthood and called it a housing market

Young people today are often labelled as forever children, but is it any surprise when most of them have no route to having their own place?

They’re the casualties of the UK’s housing crisis, caused by a lack of homes, lack of support for first-time buyers and market volatility, often caused by governments rushing policy.

The system’s broken for young people across the board, whether they are FTBs, second steppers or renters.

Where are all the homes? There’s simply not enough housing, and this has been caused by a chronic housebuilding shortage, causing prices to rocket over the past decade.

This is mostly down to a broken planning system which made it impossible to get projects approved.

Labour has made some progress to address the issue, with more schemes gaining approval at appeal, but new starts in London remain in the doldrums.

The problem now is the economic viability of these projects. Community infrastructure levies, S106 agreements, onerous regulations along with recent inflation for raw materials and labour costs have made many developments unfeasible.

Lack of support for first-time buyers Another failure is the total lack of support for firsttime buyers. Schemes designed to help people onto the ladder – like Help to Buy and the Lifetime ISA - were neglected, stripped back or withdrawn entirely.

Meanwhile, the government dropped stamp duty relief back to £300K for first time buyers from £425K despite property prices surging in recent years. Young people are finding their hard-earned savings accrued over years now goes to the taxman instead of towards their deposit.

Many young people wanting to buy are nervous about the additional stamp duty and resent being taxed twice on their hard-earned income. Many without access to the bank of Mum and Dad have simply given up.

We should scrap SDLT for first-time buyers or at least shift the burden onto sellers so they’re not the ones shouldering it.

Rental market This is all compounded by a rental market under strain. Recent changes, including the imminent Renters’ Rights Act, have reduced incentives for landlords, and increased costs, which has pushed many out of the market altogether.

The result? Less supply, pushing up rents while landlords’ costs increase which are passed onto tenants, creating a double squeeze for them. Soaring rental costs mean young people who can’t buy are also struggling to leave home and rent their own place. For those that can still manage to secure a tenancy, their ability to save for a deposit is hamstrung.

That said, Landlords selling up has caused a temporary glut in supply as their properties become available, providing a short-term window of opportunity for FTBs. However, this is temporary and has wider consequences that should be understood.

Stuck second steppers The additional property from landlords makes it harder for previous first-time buyers to sell and move up the ladder as their properties have depreciated. They’re now stuck, unable to move up, with knock-on effects across the entire property market, bringing it to a standstill. The reduction in transactions has knock-on effects for the entire economy.

Volatility issue How can both prices increasing and decreasing be bad for first-time buyers? The problem is the volatility, which makes planning impossible. Further, while price swings provide opportune moments for some, their gain is another’s loss, and that person once bitten stays twice shy. This puts them off from going up the ladder as it makes them feel more exposed and leaves them in a worse position.

A healthy property market should be slowly but steadily appreciating incrementally. This creates confidence, allows people to plan and makes it possible for savers to realistically work towards a deposit.

The system needs fixing. Now. The longterm consequences of this should worry everyone. When young adults can’t settle, they delay families, careers stagnate, and we’re seeing communities hollow out.

Schools in urban areas can’t fill places, while the country is walking into a demographic crisis as there aren’t enough people entering the workforce to support everyone moving into retirement. If we don’t support young people now, we will all suffer the consequences.

The good news is that our crisis is completely solvable, but it requires decisive, radical action. I believe the government has good intentions and has made some progress with planning, but it needs to make construction viable again, stabilise the property market, support first-time buyers and encourage more rental properties onto market to bring rents down.

Only then will young people have a chance to grow into independent adults capable of supporting their own families.

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Simon Gerrard is Chairman of independent north London Martyn Gerrard Estate Agents

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