Renting will become entrenched in the lives of thousands of people who only survive thanks to their salary and who will not see a possible inheritance as a solution either. This is clear from the report carried out by IDRA, the Barcelona Urban Research Institute, in which the data clarify this increasingly established perception among the less well-off classes. Its results destroy that hope, turned into a myth by the data, that many people will access home ownership after receiving an inheritance.
“The dynamics of the rental market have turned it into a mechanism for transferring income between the tenant population and the rentier population that accumulates excess properties,” summarized in the report titled ‘From owners to tenants. Report on growing inequality in access to property’.
The general picture is not rosy for people with fewer resources. Housing, converted almost exclusively into a market good, is configured as a vector of social inequality, say IDRA experts. In fact, more and more people have no choice but to opt for renting. Renters already represent 53% of households between 16 and 29 years old and 32% of households between 30 and 44 years old.
The matter worsens if we look to the future: 70% of tenants in Madrid and Barcelona do not expect to inherit a home that allows them to own a home. Of those who do, 80% will have to share this inheritance.
We will only have to wait a few years to observe the generational change that the document presented by IDRA glimpses. Living on rent will be a long-lasting condition that is likely to last into old age for the vast majority of tenants. If it is already common to wait for grandparents to die to be able to live in their home as the only option, the passing of the years will not even give this opportunity to the children who still live in rent.
Inheriting is no longer stopping living as a renter
Evaluated by age groups, it appears that the older you are, the lower the expectation of an inheritance that will help you get out of rent. In any case, six out of 10 renters under the age of 35 do not expect to do so. “The evidence debunks the myth that most young people will sooner or later inherit a home and stop renting,” they say from the Barcelona Institute.
The situation is worsened with migrants, in whom the expectation of inheritance is reduced to two out of every 10 people who currently live in rent. In this sense, the population with the highest expectation of inheritance are Spaniards between 16 and 34 years old, and the one with the least, after people over 65 years old, are foreigners between 35 and 64 years old, according to data collected in Madrid and Barcelona.
Even so, 30% of tenants do hope to be able to inherit, although that does not mean reaching the light at the end of this tunnel eternalized by speculation and rentism, according to the Tenants’ Unions. Within that percentage, eight out of 10 will have to share the inheritance. Furthermore, the economic value and usefulness of the homes to be inherited do not necessarily fit the needs of the tenant, IDRA maintains.
In the case of Madrid, half of the homes to be inherited are located outside an urban center, a fact that reduces their usefulness, as they cannot meet their current residential need, and their economic value. In Barcelona, 40.7% of the homes to be inherited have a value lower or considerably lower than the average price of a 60 square meter apartment, which reaches 250,020 euros, the report points out. This is how they condense the data: “All of this places us in a scenario in which the majority of tenants who will inherit are not guaranteed access to a home they own.”
On the other hand, the inheritance expectation influences the purchase expectation. The purchasing capacity of the population that will not inherit properties is very limited: only 24.8% of Madrid tenants who are not going to inherit do hope to buy a home. The rest are divided between uncertainty (31.9%) and the total lack of purchase expectation (43.3%).
Demand, artificially inflated
IDRA has also studied the reality of the home buying and selling market, which they call “inaccessible and kidnapped.” “Since 2021, after the pandemic and the measures taken, we have witnessed a sharp rise in purchase and sale prices, reaching figures per square meter comparable or higher than those of the 2007 bubble,” they highlight. Furthermore, in many areas, tenants who intend to access a first home through purchase have to face competition from buyers who already own homes and have very high assets.
The data supports these conclusions. The study indicates that in 2023 and 2024, 56% of purchases were made in cash, without a mortgage; 15% were carried out by non-resident foreigners; and that between 2008 and 2020, almost half of the homes purchased are from companies with more than eight properties. “All of this reflects that home ownership is increasingly concentrated in the hands of those who already own real estate. In the last decade, the number of large owners, those with more than ten homes to their name, has increased by 20%,” they develop.
From the point of view of these experts, “demand is artificially inflated by actors who do not have a need for housing, and this contributes to increasing prices for those who need it to live.” This means that seven out of 10 renters do not even know if they will be able to buy a home at some point in their lives.
“These data confirm that the rental market is a key source of inequality, which is generating a large social gap,” they maintain from IDRA. The study center also defends that “the rental market operates as a gigantic transfer mechanism from the population that has the least to the wealthiest sectors.” Thus, Spain is at the top of the countries with housing as the largest source of wealth with 64.2%, above the average in the European Union, established at 58%.
Objective: reduce inequality
The public policy recommendations put forward by IDRA are closely linked to reducing inequality between owners and those who are not. For this reason, they are committed to increasing the supply of long-term residential rentals at a regulated price, giving way to all the homes that are not fulfilling their residential function. Likewise, they point out that fiscal measures would be necessary to reduce inequality and guarantee access to housing, as well as measures to prevent the accumulation of housing in few hands.
Finally, the institute analyzes the current solutions promoted by both the central government and regional executives, described as “insufficient and ineffective.” Without going any further, they conclude that the policies proposed so far as a solution to the problem of access to housing for generations without property are a way of “transferring public resources to landlords and banks.”
Source: www.eldiario.es
