Think tank blames high rents for Millennials not moving for jobs
A think tank is blaming high rents for apparently stopping Millennials moving to better paying parts of the country.
A report from the Resolution Foundation says the common stereotype of millennials being footloose when it comes to seeking jobs is untrue.
The report finds that the number of young people aged 25 to 34 starting a new job and moving home in the last year has fallen from 30,000 in 1997 to 18,000 in 2008.
The think tank says this fall is all the more surprising given that young people today are far more likely to live in private rented accommodation, the tenure traditionally seen as enabling mobility.
It says that while a greater share of private renters today have children, which can make it harder to move, this only explains a tiny part of the fall in job mobility for young private renters.
The report goes on to claim that private rents have risen fastest in higher-paying areas of the country – rising by almost 90 per cent the among highest paying local authority areas, compared to just over 70 per cent among the lowest paying.
“This has significantly reduced the living standards uplift from moving for work once housing costs are factored into the equation” claims a statement from the Resolution Foundation.
The report finds that once housing costs are deducted, the average private renter moving from a low-paying area such as East Devon to a mid-paying area such as Bristol would have seen a financial gain of 16 per cent in 1997, compared to just one per cent last year.
Similarly, moving from a low-paying area straight to a high-paying area such as Croydon would have seen a financial gain of 26 per cent in 1997, compared to a three per cent fall last year.
The Foundation accepts that there are also likely to be a range of non-financial reasons for falling job and home mobility, such as people preferring to stay close to their parents and local networks.
It adds, however, that increasing house price gaps between places making it harder for older home owners to move without also having to downsize to a significantly smaller property.
“A key reason why people move around for work is the lure of a bigger salary. But increasingly those pay gains are being swallowed up by high housing costs” says Lindsay Judge, senior policy analyst at the Resolution Foundation.