Homeownership rates in the European Union (EU) have experienced a notable decline between 2012 and 2020, driven primarily by the decreasing ownership among young adults and low-income groups. This trend has resulted in an increase in the reliance on private rentals among the 20-29 age group, leading to housing insecurity and adequacy issues. A comprehensive report by Eurofound, titled "Unaffordable and Inadequate Housing in Europe," sheds light on the housing problems faced by EU citizens, identifies affected population groups, analyzes relevant policies, and provides policy recommendations to improve the situation.
During the period from 2012 to 2020, several EU countries witnessed a decline in homeownership rates. Denmark, Cyprus, Spain, Lithuania, Finland, and Bulgaria experienced decreases of over 3 percentage points. This downward trend was particularly evident among young adults and low-income groups. Young adults between the ages of 20 and 29 increasingly turned to private rentals as a result. Unfortunately, the private rental market in Europe has been plagued by housing insecurity and adequacy problems, including low energy efficiency.
The lack of affordable housing options has left many young adults unable to leave their family homes. Between 2007 and 2019, the average age at which at least 50% of people in the EU moved out of their parental home increased from 26 to 28. Countries such as Spain, Croatia, Italy, Cyprus, Belgium, Greece, and Ireland experienced the largest increases in the number of people aged 25-34 living with their parents between 2010 and 2019.
Eurofound's report highlights the importance of addressing the housing problems faced by EU citizens within the broader context of the right to a standard of living adequate for health and well-being, as outlined in the United Nations Universal Declaration of Human Rights. It also emphasizes the housing-related rights detailed in the European Pillar of Social Rights. The report examines existing policies, their effectiveness in addressing housing problems, and offers policy recommendations to improve the situation.
Expanding the supply of quality housing is identified as a crucial factor in alleviating the pressure on rents and prices. Additionally, measures to reduce vacant dwellings are recommended. These issues are particularly relevant to young adults who have faced both supply issues and reduced access to credit following the Great Recession.
Renters in the private rental market have faced steeper cost increases compared to homeowners. The report highlights that 46% of private rental market tenants feel at risk of being unable to afford their accommodation in the next three months, and 34% report problems related to poor energy efficiency. These figures underscore the precarious situation faced by tenants and the urgent need for improvements in the rental market.
The report cautions that housing policies must be targeted and appropriate to avoid exacerbating inequalities. Policies aimed at increasing housing affordability may inadvertently drive up rent and purchase prices. Similarly, ownership support often benefits higher-income individuals more than those with lower incomes. It is essential to consider the potential impact of such policies and ensure they do not encourage individuals to take on mortgages they cannot afford.
Eurofound's Executive Director, Ivailo Kalfin, emphasized the importance of meeting the present and future housing needs of citizens in Europe. Basic rights to housing must be met to ensure human dignity and promote social cohesion. Policymakers must prioritize vulnerable groups across all housing tenures when designing housing support coverage. Furthermore, future needs should be considered when improving housing adequacy.
The decline in homeownership rates across the EU, particularly among young adults and low-income groups, is a cause for concern. The Eurofound report highlights the urgent need to address the unaffordability and inadequacy of housing in Europe. By expanding the supply of quality housing, reducing vacant dwellings, and implementing targeted policies, European policymakers can work towards providing both adequate and affordable housing for all citizens. It is crucial to ensure that housing policies do not inadvertently exacerbate existing inequalities and that future housing needs are taken into account. Only through these concerted efforts can Europe address the housing crisis and create a more inclusive and equitable society for its citizens.