Rising Housing Costs Threaten Parenthood in Britain

As new parents face rising costs, the dream of family life in Britain is increasingly out of reach. Simon Clarke, a new father, highlights the harsh reality that many couples cannot afford to have children or the number of children they desire. The once-held belief that hard work would lead to home ownership and family stability is crumbling, leaving many young people questioning their future.

The Broken Promise of Home Ownership

The UK is grappling with a demographic crisis, where a shrinking workforce is burdened by the costs associated with an aging population, escalating health care demands, and the highest tax burden since World War II. Housing has emerged as a focal point in this broken social contract, with a lack of new construction leading to soaring home prices. Research from Schroders indicates that UK house prices are now at their highest relative to incomes since the 1870s. Rents have also surged, further straining household budgets.

A recent study by Benjamin Couillard of the University of Toronto underscores the impact of housing costs on fertility rates in the United States. Couillard’s research reveals that rising housing prices since 1990 contributed to an 11 percent decrease in U.S. births between the 2000s and the 2010s—accounting for 51 percent of the overall decline in fertility. A similar study in the UK could yield even more alarming results, given the country’s current housing crisis.

Policy Implications and Migration Challenges

Addressing these issues requires a multifaceted approach, including a reassessment of immigration policies. In a paper published by Chris Worrall for Onward, projections illustrate the implications of various migration scenarios on housing prices and rents in England and Wales. In a high migration scenario—defined as net inflows of over 400,000 individuals annually—both prices and rents are expected to increase, even with proposed increases in housing development.

Worrall’s analysis suggests that without addressing the existing constraints on housing supply, simply increasing migration will exacerbate the challenges faced by young families. By contrast, implementing a model similar to Denmark’s, which focuses on energy and industry alongside controlled migration, could lead to improved housing affordability and increased real incomes.

Two key lessons emerge from this analysis. First, the issues stemming from a fractured social contract cannot be resolved by merely increasing population numbers within the same inadequate system. Second, if economic growth through migration is the goal, a comprehensive housing strategy is essential. This includes robust reforms rather than the current piecemeal approach, as demonstrated by Steve Reed, the Housing Secretary, who has recently sidelined the National Development Management Policies—an important reform initiative.

To create a future where more individuals can consider parenthood, it is imperative to establish a housing system that prioritizes construction, align migration policies with available housing, and rethink the tax and welfare structures to view children as a national investment rather than an afterthought. As Simon Clarke prepares for fatherhood, he does so amid a landscape that demands urgent attention to these pressing issues.