Generation Z faces a brutal truth. Finding a decent home will be a lifelong struggle | Sonia Sodha

Emily is 72. She left school after her A-levels, joined a local accountancy firm as a clerical assistant and was sponsored through her accountancy qualifications by her company while she was working. She married at the age of 23, bought her first house for £12,000 with her partner a couple of years later and had two children. Today, she and her husband have paid off the mortgage on their £600,000 house and have a healthy savings pot and a combined income of £50,000 from their pensions.

Emma is 27. She also wanted to become an accountant, so went to university to do a degree in business, then got her first trainee accountant job at 22. On top of tax, she’s paying 9% of her income above a £20k threshold towards her student loan. Given the interest rates on her loan, she expects to be doing this until her early 50s, when any remaining loan will be written off. She’s spending more than half her income renting a room in a houseshare. She’d love to buy a one-bed flat with her partner in the next few years but neither has savings or parents who can help them out and between rent and student loan payments they can’t see themselves ever being able to save a deposit. Emma’s situation in 2022 isn’t great. But it gets progressively worse. In 2037, they’re renting a two-bed flat without a garden – luckier than many, but tough with two children under 10. They’re still spending most of their income on rent. Ten years on, they’ve had to move twice, once having to move the children to a different school, because of landlords putting up the rent. They’re still in a small flat and they’re worrying about retirement in 20 years’ time: they have no savings, threadbare pensions and don’t know how they’re going to carry on paying rent once they stop working.

Emily and Emma are fictional individuals. But they are typical of those who’ve done well for themselves in their generation. The most significant difference between them is that Emily was born in 1950, Emma in 1995. Much improved over those 45 years: longer life expectancies, less inequality between the sexes, better education outcomes, more international travel, the benefits of technology.

But there is a gulf between their respective abilities to achieve a decent, secure home for themselves and their families. So often we talk about getting on the housing ladder as a financial benefit and of course those in Emily’s generation of baby boomers who bought their homes have reaped a significant financial windfall from rising house prices.

Yet the benefits go way beyond bagging yourself an inflated asset that you can rely on in retirement or pass on to your adult children. In the UK, buying your own home is the only way of guaranteeing security for yourself through the life stages that, in 2022, are still to come for Emma. It is grim being a renter in your mid-20s in 2022, given the way rents have spiked in the last couple of years; the fact that, even a few years ago, renters were paying the highest rents in Europe, spending 36% of their income on housing compared with 12% for mortgaged owners; and the grotty state of much that’s on offer and the fact you have no idea where you’ll be living once your tenancy comes to an end.

But imagine still being subject to the whims of a landlord and substandard housing – around a quarter of privately rented homes don’t meet the decent homes standard – when you have young kids, worrying about when the next move is, how far it will take you from school, grandparents and friends, whether you will have to downgrade and lose a bedroom just as they are getting older.

Then imagine how scary your approaching retirement will be, with a state and private pension system that simply isn’t designed for people who haven’t either already paid off their mortgage or who don’t have the long-term security and controlled rents of social housing.

Achieving the security of a home – so fundamental to everything in life – in the UK requires you to own it or to live in social housing. Yet the social housing stock has shrunk in recent decades and there is a burgeoning army of people in their 20s and 30s who will never own. The only option left is renting from a private landlord. The private rented sector has swollen to accommodate this, doubling in size in just a decade. But it absolutely does not deliver what people need and what it does offer comes at huge cost to tenants, but in a way that generates significant profits for landlords. The shift in cost of acquiring skills from employers to individuals, with graduates having to pay so much for so long for a university education – and compared with the financial prospects of those who don’t go to university, they’re the lucky ones – has only made this worse.

This is one of a number of looming social crises that political leaders have refused to grapple with. That’s partly because of politics: any solution to this will effectively redistribute from owners, who are greater in number and more likely to vote than renters. But it is also the economics: growth in the British economy has been driven too much by the consumer spending propped up by a housing bubble and not enough by business investment and exports; Brexit has made the rebalancing that Gen Z so desperately requires even harder.

We need a painful correction to house prices and radical reform of the rental market, with the state capping rents and enforcing long-term tenancies, not-for-profit housing associations buying up and renting homes landlords wish no longer to, or cannot, operate and a huge programme of public investment in building homes for rent. The longer politicians put off the inevitable, the more parents and pensioners of the future will bear the cost of their miserable failure.