Understanding Society, the UK Household Longitudinal Study, University of Essex - Written evidence (UKH0026)

Key points

• Understanding Society, the UK Household Longitudinal Study, is a world-leading survey of continuity and change in life in the UK, funded by the UKRI Economic and Social Research Council and supported by a number of government departments and devolved administrations. In April 2020, we began a regular new survey to look at the impact of Covid-19 on the UK population.

Research using our data has shown:

• Home ownership levels have fallen, but buying a home is strongly influenced by socio-economic status.
• Children with parents who have property wealth are less likely than they were to be homeowners themselves by the time they are 30, but still more likely to own property than those whose parents are not homeowners.
• The traditional preference of couples to become homeowners before having their first child has been undermined by rising unaffordability and housing uncertainty.
• Government initiatives to help young adults buy property are likely to disproportionately benefit more advantaged social groups and increase inequality.
• A fairer way to improve young people’s residential conditions would be to improve the cost and quality of renting.
• The Covid pandemic has highlighted certain housing problems, emphasising a need for greater investment in social housing, more secure private tenancies, and reversing reductions in housing benefit support.
• Housing-related factors may now be more important than labour market ones in residential decision-making, raising questions about choice and opportunity.
• Policy needs to address the question: who is not able to move to improve their circumstances?

1. Introduction

1.1. Understanding Society, the UK Household Longitudinal Study, is a world-leading longitudinal survey of continuity and change in UK life. From an initial sample of around 40,000 households, the same people are invited to participate in annual surveys. Together with its predecessor, the British Household Panel Survey, the data now span 28 years. Understanding Society is based at the Institute for Social and Economic Research at the University of Essex.

1.2. Understanding Society is primarily funded by the Economic and Social Research Council (ESRC), part of UK Research and Innovation, and has received funding from a number of government departments, devolved administrations and agencies. Anonymised data from the surveys are made available to registered researchers to use in their own research projects.

1.3 In April 2020, Understanding Society began a regular new survey to look at the impact of coronavirus on the UK population. When released, these data were provided alongside pre-crisis baseline data (2019) to allow researchers to measure the impact of the pandemic.

2. Social and demographic factors shaping housing demand

2.1 Home ownership has fallen in the last 30 years, and children with parents who have property wealth are more likely to be homeowners themselves by the time they are 30.

2.2 Between 1991-2003, about 40% of people whose parents were homeowners had become homeowners themselves by the age of 30, compared to 19% of those whose parents were not homeowners.

2.3 By 2004-17, these figures had dropped to 25% of those whose parents were homeowners and 9% of those whose parents were not.

2.4 In many countries, young adults are finding it increasingly difficult to buy their first property because of a combination of factors such as high prices, debts (often due to the cost of higher education), delayed family formation, less welfare provision and difficulty in finding secure, well-paid work. Home ownership increasingly depends on having parents who are in a financial position to help.

2.5 In recent decades, the preference of couples for becoming homeowners before having their first child has been undermined by rising housing unaffordability and housing uncertainty.

2.6 Britain is an archetypal example, with homeownership rates among young adults having fallen substantially as a result of low wages, unemployment, reductions in the availability of mortgage credit, and rising house prices. This has produced a housing crisis.

2.7 New research suggests there is no longer a link between homeownership and transition to parenthood, at least among Britain’s ‘generation rent’.

2.8 Buying a home in early adulthood is more common in Britain than in Germany, but also more strongly influenced by socio-economic status. In Germany, it is common to rent for a lifetime, and renting carries less stigma than in Britain.

2.9 British government initiatives to help young adults buy property are likely to disproportionately benefit more advantaged social groups and effectively increase inequality in the housing market and in wealth accumulation.

2.10 A fairer way to improve young people’s residential conditions would be to improve the cost and quality of renting, reducing the need to own property.

3. Balance of demand for new housing – ownership, renting, and social housing

3.1 Housing problems were highlighted during the Covid pandemic, such as renters behind on housing costs, and overcrowding – and they have multiple causes: a focus on increasing supply to the detriment of other objectives; sustained reductions in housing benefits; and a private rented model which does not meet the needs of tenants.

3.2 A combination of greater investment in social housing, more secure private tenancies, and reversing reductions in housing benefit support – such as the cuts to Local Housing Allowance (LHA) – will be needed to improve the contribution of housing to health.

4. Impact of government policy on housing

4.1 During the pandemic, there has been increased residential mobility (moving home) for home owners and students, and suppressed mobility of renters. The increased mobility of owners and decreased mobility of renters erased tenure differences.

4.2 This demonstrates the power of policy to shape residential patterns and experiences. For example, the relative stability of renters shows the potential for (non-eviction) policy to provide housing stability. The provision of accommodation for homeless people also had a significant impact.

4.3 Behaviour change during the crisis shows a desire to be close to family and friends. This could be an acceleration of a trend since 2010, with people preferring or needing to live closer to family/friends as informal support replaces some of the support that has conventionally been provided by the state.

4.4 This may mean that housing-related factors are now more important than labour market ones in residential decision-making, and it raises questions about choice and opportunity. Policy needs to address the question: who is not able to move to improve their circumstances?

References

2.

John Wood, Stephen Clarke, House of the rising son (or daughter): the impact of parental wealth on their children’s homeownership, Resolution Foundation, December 2018: https://www.resolutionfoundation.org/publications/house-of-the-rising-son-or-daughter/

Valentina Tocchioni, Ann Berrington, Daniele Vignoli, Agnese Vitali, The changing association between homeownership and the transition to parenthood. Demography (in press) https://eprints.soton.ac.uk/446102/

Sait Bayrakdar, Rory Coulter, Philipp Lersch, Sergi Vidal, Family formation, parental background and young adults’ first entry into homeownership in Britain and Germany, Housing Studies, 2019: https://doi.org/10.1080/02673037.2018.1509949

3.

Laura Gardiner, Maja Gustafsson, Mike Brewer, Karl Handscomb, Kathleen Henehan, Lindsay Judge, Fahmida Rahman, An intergenerational audit for the UK, Resolution Foundation, October 2020: https://www.resolutionfoundation.org/publications/intergenerational-audit-uk-2020/

Adam Tinson, Amy Clair, Better housing is crucial for our health and the COVID-19 recovery, The Health Foundation, December 2020: https://www.health.org.uk/publications/long-reads/better-housing-is-crucial-for-our-health-and-the-covid-19-recovery

4.

Nissa Finney, Vivian So, David McCollum, Hill Kulu, Residential mobility in the UK during the coronavirus pandemic: the rise (and rise?) of kinship, roots and boomerang migration? Presented at European Network for Housing Research’s Housing, Migration and Family Dynamics Workshop, January 2021. Paper forthcoming.

September 2021