Homeownership Isn’t Working Out for British Millennials

British millennials face a housing crisis: flats have lost value due to scandals, higher rates, and reduced buyer incentives, while houses continue to appreciate. This traps flat owners, making upsizing unaffordable amid political uncertainty.

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Bloomberg 7.0
Financial Media
Olivia Rudgard 3.0

Homeownership Isn’t Working Out for British Millennials

UK housing market

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The housing market weakness, particularly in flats, combined with higher interest rates and reduced buyer incentives, suggests a cautious downward trend for small-cap and domestic-focused equities (RUT) as consumer confidence and spending may be impacted.

Olivia Rudgard

The dream of home ownership isn't working out for British millennials. Historically a great investment, homes in London rose 500% from 1996-2016, but over the past six years, apartments in higher-end parts of outer London have lost value.

Apartments are often the first step on the property ladder, but scandals around fees, building safety, and poor management have piled costs and anxiety onto young homeowners.
Olivia Rudgard

Tougher regulations around lettings have led many landlords to sell, flooding the market with new stock. Higher interest rates and fewer incentives for first-time buyers have made it tougher for apartments to find new owners.

This is bad news for people who want to upsize because, unlike flats, the value of houses has carried on growing, making it difficult to take that next step.
Olivia Rudgard

Millennials face tough decisions: is a two-bed apartment large enough to have a baby? Can they wait and see if things turn around? But with political uncertainty at home and abroad, many don't have a choice but to take the plunge.

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