William Eichler 17 July 2017

Housing crisis risks causing ‘demographic time bomb’, report says

High house prices are preventing a generation of people from having children and risk contributing to a ‘demographic time bomb’, think tank warns.

A new report from the Adam Smith Institute argues unaffordable housing has forced people to have smaller families and delay starting a family until later in life.

When combined with the decrease in immigration expected after Brexit and the country’s ageing population, the lower birth rate risks a demographic crisis that will see taxes increasing on working-age people in order to pay for their parents and grandparents.

High housing costs make this situation worse, argues the free market think tank.

Though rising house prices increase the birth rate among existing homeowners, they also keep people renting where they are less likely to have children.

This means the net effect of rising house prices is ‘highly negative’ on the national fertility rate.

Between 1996 and 2014, a 10% increase in house prices resulted in a 4.9% decrease in births among renters but just a 2.8% increase in births to homeowners – a net decrease of 1.3%.

The think tank estimated between 1996 and 2014 high house prices stopped approximately 157,000 children from being born — a trend, the report warns, that will get even worse without ‘radical action’ on housing from Whitehall.

The population over 85 years of age doubled between 1985 and 2010 and is expected to constitute almost 5% of the population by 2035.

This has ‘serious cost implications’ for taxpayers, with the over 85s costing the NHS three times as much as the average 65-74 year old whilst the number of working-age people for every pensioner is likely to fall from 3.2 to just 2.7 by 2037.

‘The housing crisis is a well-known immediate economic problem, but this report showcases how it is wrecking the lives of the people of this country, preventing them from having the children they want to have,’ said Andrew Sabisky, independent researcher and author of the report.

‘This private tragedy will, in the long-run, entail massive knock-on costs to public finances.

‘Housing market liberalisation is something the Government should do anyway, but this report outlines a new set of pressing reasons for it to act.’

SIGN UP
For your free daily news bulletin
Highways jobs

Road Worker

City of Bradford MDC
Band 6 £20,043 - £22,129 pa
Bradford Metropolitan District Council is looking for two Road Workers to join the Highway Delivery Unit. Bradford, West Yorkshire
Recuriter: City of Bradford MDC

Senior Practitioner - Family Support and Protection

Essex County Council
£41552 - £50290 per annum + + Free Parking & Local Gov Package
Closing Date
Recuriter: Essex County Council

Senior Planning Enforcement Officer

Greater Cambridge Shared Planning
Grade 5, £30,737 - £35,747 per annum
An exciting opportunity has arisen within the Greater Cambridge Planning Enforcement Team Cambourne/Cambridge/Hybrid
Recuriter: Greater Cambridge Shared Planning

Assistant Engineer / Engineer

City of Bradford MDC
£24,920 - £34,373 pa
This is an opportunity to join the highway maintenance team Bradford, West Yorkshire
Recuriter: City of Bradford MDC

Technician - Maintenance Programmes (3 Posts)

Derbyshire County Council
£23,657 - £25,568 per annum - Plus market leading package (see below)
This is an exciting time to join our in-house Highways Service Hybrid
Recuriter: Derbyshire County Council

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.