Young people who want to buy a flat

Now, I know that it sounds strange to speak, in these times, of young people who want to buy a flat. And it is, because all the discourse that we hear from the public powers consists of recognizing that our youth has, among others, a serious problem in accessing housing, but all the aid that is established and that is discussed is directed, exclusively, for rent, as if today’s youth did not have the right to buy a home recognized as their parents did at their age, and even earlier.

I have come to say, among friends, that it would seem that, now, renting is “on the left” while buying a flat is “on the right”, since none of the many measures that the Government includes in the Housing Law is aimed at help the most disadvantaged young people to buy. Because they have no doubt that those who were born into a wealthy family receive family support to buy it.

We could say, then, that an important problem has been detected and the Government only offers help for one of the two possible solutions (rent) excluding, for reasons that escape me, the other (buy), thereby reducing the freedom of choice for the young person. in need of public help to carry out his life project. Let’s see it with data. Today in Spain we have just over six million young people between 18 and 29 years old, a figure lower than that of five years ago. From them, only 20% have been emancipated from their parents and they have done so at an age closer to 30, one of the highest in Europe. Of the emancipated, the number of homeowners has fallen to 26%, compared to 54% in 2008, while the number of those living in rents has risen to 49% (it was 33% in 2008 ), with the rest living in flats assigned by relatives, or other types of tenure.

There is, therefore, an objective problem in Spain today to access a home for young people and, among those who access, the number of those who do it for rent is growing, compared to those who buy. All this, compared to 2008, as a reference. Why does this happen? The phenomenon has been well studied and generates a broad consensus among experts: the high youth unemployment (around 38% of those under 30 years of age), the precarious employment of those who work (almost 70% do so with temporary contracts) and the The low salaries they receive (the average salary of young people does not reach mileuristas and 33% are at risk of poverty), explain the initial difficulties they have in accessing a home.

The next question would be: do young people today resort more to rent because it is cheaper than buying? According to different studies carried out, young people dedicate around 80% of their income to pay the rent, while the payment of a mortgage would amount today, only, to 60%. If this is the case, what is the reason why they choose to rent more than to buy?

The main obstacles for the purchase of a house by young people are two, with different characteristics: they lack the prior savings necessary to pay the down payment (around 20% of the value of the apartment) and, in addition, in many cases, they do not have labor contracts required for the granting of a mortgage loan that would cover 80% remaining of the price. This is a fundamental difference from the times of the bubble when a mortgage was obtained for a value much higher than the transaction price of the property. If now, as before the boom, the mortgage only covers, at most, 80% of the value of the house, the purchase operation can only be accessed if the young person has solved the problem of paying the down payment.

Then, beyond other types of considerations, there is a significant number of young people who want to buy a home, give up when they see it impossible and are forced to deviate to rent, with the consequent heating of this market and the rise in the price of the same.

I am not going to go into analyzing, in the abstract, the respective advantages and disadvantages of renting versus buying. I am interested in taking the desire of those young people who want to buy a flat and, given the impossibility of doing so, move to rent, laden with frustration. I think that if public policies could give them a hand, their vital and economic objective would be satisfied (housing is the main asset of Spanish families), also reducing demand and rental prices. And I take it for granted that those young people who cannot afford to buy a flat without public aid are those from the most disadvantaged families, which is why rent ceilings should be established when receiving aid, as well as limits to the price of housing. floor and other conditions, to avoid that an aid designed for young people (demand), ends up becoming, as happened with the tax deduction for the purchase, in an aid to the promoters (offer).

At the present time, interest rates and the great existing financial availability allow very tight combinations of the price of a mortgage. It is true that a long-term commitment is acquired, but on an asset that can always be sold, with little deterioration in value, or made profitable by renting it. So why don’t the young people they want to buy a house? The main obstacle is not the price, nor the mortgage, but the initial down payment that must be paid and that today is not covered by the mortgage as it was in the boom years. This income becomes the main problem for young people with stable employment contracts, but without previous savings, or relatives who can lend them. There it is, according to all the studies by INJUVE and the Bank of Spain, the main problem. In the words of the latter: “For most young people, the big problem is the initial amount of the property price.”

Related news

And I say, a Government that is resorting to ingenious formulas to facilitate the access of young people to rent (rent voucher, non-payment insurance & mldr;), could not you think of a way to help with the entrance to those young people who want to buy and can they then cope with the mortgage? For example, granting them a public guarantee, with conditions, to encourage banks to include the entry in their financing.

We do not live a real estate bubble like the one of yesteryear. We can even say that construction is not being one of the most dynamic sectors in the recovery. But we have a youth that increasingly feels that society is turning its back on them, cutting off their wings and forcing them to remain refugees in their family. Those who do not have ‘possible’, of course. And it is about not leaving behind young people from disadvantaged families but who want and can buy a flat, if someone helps them with the entrance. Is any government, central or regional, encouraged?