Who are the millennial generation?
Millennials, otherwise known as Generation Y, are those born between 1980 – 2000. They have also been labelled the ‘Peter Pan’ generation due to many delaying rites of passage into adulthood for longer periods than those before them. This delay may be attributed to economic pressures not faced by previous generations.
| This article discusses one such rite of passage, homeownership, and the options available to a squeezed millennial generation. |
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Does the housing market meet the needs of the millennial generation?
Millennials are a large demographic of London’s population but with the average London house price at fourteen times the average London income, millennials are likely to be known by the moniker ‘Generation Rent’ for the foreseeable future.
Many are trapped in the ‘squeezed middle’ as they cannot afford to buy; yet are a low priority for social housing. With many millennials working on a freelance basis or on precarious zero-hour contracts, securing mortgages can be difficult.
Millennials are often seen as a transient generation, as they are starting families later, have far more varied career trajectories and are more mobile than the previous generation, leading to a rise in co-working spaces and hotel-like housing services and apps.
| It is a myth, however, that millennials do not seek places to belong and do not want to invest in and live as part of communities. |
As well as affordability, there is often an issue of spatial appropriateness. Millennials are living and working differently from any previous generation. The private rental sector can often be an expensive compromise, offering tight living situations that snub communality, lack quality and scrimp on space.
As architects we see the home as more than a financial asset: it is an essential armature to support the good life — a place to dwell and belong and we believe that the current housing stock is struggling to offer millennials this.
How are systems aimed to help millennials falling short?
- Case Study: STARTER HOMES
The Starter Home policy is a scheme that allows the purchase of a new build home for a discount of at least 20% off the market price. It must be the buyer’s first home and the buyer must also fall within the required age bracket. Yet only the top third of eligible first-time buyers in London will be able to afford them, even at a 20% discount.
Starter homes can then be sold at full market value after five years giving larger returns to people already able to afford a home and creating further upward pressure on house prices. This scheme has now been withdrawn.
| Spatially, starter homes are not meant to be long-term residences. This often means that homes are smaller and built with lower-quality materials. |
- Case Study: HELP TO BUY
The Help to Buy scheme enables first time buyers without access to a standard 10% deposit to pay 5% instead with the help of a Help to Buy equity loan. However, this increased accessibility to finance allows people who have the 5% deposit in cash to buy beyond their means, putting the buyer at an increased financial risk.
Developers’ pricing responds to the increased access to finance, resulting in house price inflation. The dream of homeownership becomes further out of reach for millennials without access to a cash deposit.
- Case Study: COMPACT LIVING HOUSING PROVIDERS
Compact living providers, for example, Pocket Living, aim to provide a means to get on the housing ladder for those that cannot afford to do so conventionally. Their answer to achieving affordability is to squeeze the size of the home rather than innovate financially. Their approach relies heavily on government policy on starter homes and Help-to-Buy and also advocates for smaller space standards.
Could collective models of ownership have more to offer millennials?
Collective living presents obvious advantages. Collective purchasing power, domestic economies and financial economies of scale are obvious practical benefits. Socially, communal living can give a sense of belonging and extended family that ‘Generation Lonely’ report to be missing from their lives. Financially, however, there is still a way to go to make collective models of ownership viable for most millennials.
- Case Study: COMMUNITY LAND TRUSTS (CLT)
The CLT model of ownership is designed to be truly affordable. They can build diverse communities of residents who wish to live in a particular area for a longer period of time. CLTs maintain ownership of between 20-60% of each property in order to keep control of rents and tenancies of a site.
| Whilst CLT’s are a helpful alternative, they are still too rare an opportunity to be a viable option for most millennials. |
Case Study: RURAL URBAN SYNTHESIS SOCIETY (RUSS)
RUSS is a contemporary interpretation of Walters Way, the self-build development spearheaded by Walter Segal, seeking to create a new Community Land Trust with self-built homes and a communal garden. The homes are designed to be affordable with RUSS owning 20% of each home.
A shared ownership agreement is in place, where residents buy 10% of the property whilst paying rent on the remainder. The resident may buy a larger share when they can afford to. Rents are controlled by RUSS and they have a scheme wide mortgage with the Ecological Building Society. Access to a property will cost no more than a third of a residents wage.
What can architects and facilitators of the built environment do?
– Advocate for different models of homeownership: for policy and legislation reform, whilst working with developers to facilitate more collective ownership models. We can lobby to see more models of collective ownership that allow long term residents to build equity at a rate they can afford.
– Create spaces that facilitate sharing as a choice and offer a well-designed hierarchy of spaces that transition from individual to communal. Homes that allow for collective living but also provide places to withdraw.
– Design spaces that challenge traditional domesticity. Period properties are highly sought after yet are often ill-equipped to host 21st-century living. So as architects we should aim to improve traditional layouts in favour of plans that provide generosity in the right places, whilst designing around activities rather than prescribed rooms.
– Work to integrate developments into the wider community and make brilliant pieces of city that engage, delight and include.
– Design sustainable developments that offer a ‘structure as finish’ approach. This allows users to embrace a raw aesthetic that minimises the use of secondary finishes, or alternatively, it can empower residents to personalise finishes if they wish.
– Work innovatively and experiment with materials and processes to ensure economic viability without sacrificing aesthetic quality, high performance and durability.
| If you are interested in working with Architecture for London to explore some of these themes further – we’d love to hear from you. |
Special thanks to the research of Architectural Agency, a think tank of The London School of Architecture.
Image credits: Raphael Arthur & Chiara Barrett