The Politics of Age

John Stewart, Formerly Director of Economic Affairs at the Home Builders Federation

When I began to prepare this article in the days before the political party conferences, I suggested we might look at trends across different age groups, most notably any divergences between young people and the retired.

Progress Between Generations
An underlying belief that evolved in the 20th Century was that each generation would have a better standard of living than their parents, what Theresa May calls the “dream of progress between generations”. However a study by the Resolution Foundation (The Millennial Bug; public attitudes on the living standards of different generations) has found signs that this belief is being disrupted: “In a range of areas, including their earnings, housing situation, and the extent to which they are building up resources for later life, the living standards of younger adults appear under threat.”
Nearly half of adults (48%) in a major quantitative survey for the Resolution Foundation believe that Millennials will have a worse life than their parents, while less than a quarter (23%) believe young people will have a better life. Millennials themselves, as well as their parents, hold these pessimistic views.

The Politics of Age
According to YouGov post-election research, young people voted overwhelmingly for Labour, whereas older people voted Conservative. For example, 66% of 18-19 year-old first-time voters voted Labour and only 19% Conservative. In an almost exact reversal of this behaviour, 69% of those aged 70+ voted Conservative and 19% Labour.

The Resolution Foundation study discussed above identified the housing situation as a key area of difference between today’s young people and their parents, this can be seen across a range of variables.

The crisis in housing affordability denies many young people access to home ownership. The average house price in 2016 was 7.6 times average earnings, against 3.6 times earnings in 1997.

This in turn has led to a collapse in home ownership among young people. Among those aged 16-34, ownership in England fell from 52% (2.0m) in 2003-04 to 33% (1.4m) in 2015-16. Another consequence of stretched housing affordability is that more than a quarter (26%) of 20-34 year olds lived with their parents in 2015, up from 21% in 1996.

A third consequence of stretched affordability is that many more young people live in private rented housing. The number of 16-34 year-olds renting privately in England doubled from 1m (26%) to 2m (49%) between 2003-04 and 2015-16. Both political parties have recognised that housing is a key electoral issue, especially for young people.

Labour Housing Policies
Labour identifies “a crisis of supply and a crisis of affordability”. It pledges 100,000 genuinely affordable council and housing association rental units per year, the biggest programme for 30 years. It also has rather vague promises to build “thousands of low-cost homes reserved for first-time buyers” and to give “local people buying their first home ‘first dibs’ on new homes built in their area”, along with a guarantee to fund Help to Buy to 2027.

Labour has proposed introducing some form of control on rent rises, although its announcement lacked essential detail. Most experts believe rent controls would do nothing to help close the affordability gap because they would lead to a reduction in the supply of privately rented housing.

Conservative Housing Policies
The Conservatives put housing at the centre of their policy platform with Theresa May’s statement that “as Prime Minister I am going to make it my mission to solve this problem. I will take personal charge of the Government’s response, and make the British Dream a reality by reigniting home ownership in Britain once again.”

The highly successful Help to Buy scheme, which has enabled 134,000 people to buy a new home, is to have another £10bn of funding for an estimated 130,000 buyers by 2021. Commentators have argued that the scheme just adds to demand and therefore pushes up prices. However with an estimated four in ten sales being truly additional, the scheme adds to supply and so does not feed solely into higher prices. The Prime Minister announced £2bn for a new generation of 25,000 affordable social rented housing.

In addition to the conference announcements, the Government is already consulting on a range of measures to boost supply (Planning for the right homes in the right places: consultation proposals.) It reckons that its proposed new approach to estimating the dwelling provision in local plans could result in 266,000 dwellings per annum across England.

Housing Policies to Benefit Young People
Labour and Conservative housing policies have a strong focus on meeting the housing aspirations of young people. However Labour’s sweeping proposals lack detail. For example, it does not say how much it would cost to fund Help to Buy until 2027. The Conservative proposals are more measured, and so appear less ambitious. In particular, the supply-side proposals in February’s White Paper (Fixing our broken housing market), and in the more recent consultation, are very technical and will have little electoral appeal. However they could have a major impact on supply, and so do more than any other policy to help solve the long-term affordability crisis for young people.