Seven propositions about ‘generation rent’

ABSTRACT

Intergenerational disparities in housing have emerged across countries, giving rise to narratives of “generation rent”. Despite popularization of the term across academia and public discourse, it remains nebulous, divisive, and lacking nuance. Through seven propositions, this paper synthesizes recent evidence to more accurately capture the breadth of young adults’ housing inequalities and advance debates surrounding “generation rent”. It begins by addressing its drivers, describing shifts in the political economy of (rental) housing which disproportionately disadvantage young adults. It then identifies features of “generation rent”, illuminating heterogeneity between socio-economic groups, housing situations, and rental types. Finally, it charts outcomes of housing market pressures which reshape lives and livelihoods across generations, albeit in different ways. To this end, this paper puts forward a new classification of four sub-categories conspicuous in the historically homogenized notion of “generation rent”, namely “second generation owner”, “delayed buyer”, “tenant” and “precariat”. It argues that, harnessed correctly, “generation rent” can be a useful lens to illustrate wider housing sector transformations and their effects for class-stratification and the reproduction of socio-economic inequalities.

KEYWORDS:

• Generation rent
• young adults
• housing
• inequality
• neoliberalism

An introduction to ‘generation rent’

Over the course of this century, intergenerational disparities in housing have come to the fore. Older cohorts benefitted from easier access to social-rental housing and homeownership, whereas younger adults must navigate a more precarious reality. This includes increasingly insecure, unaffordable, or undesirable housing options (Coulter, Bayrakdar, and Berrington 2020; Hoolachan and McKee 2019), a loss of residential independence (Bricocoli and Sabatinelli 2016; Iacovou 2010), and socio-economic hardship in the short and the long run (Arundel 2017). A growing narrative around “generation rent” has emerged charting these changing conditions. Despite the popularization of the term across public discourse, it remains nebulous, divisive, and lacking nuance.

Without a common definition, evolving understandings of “generation rent” has been mostly determined by its usage. Thought to have originated in the UK around 2011, the moniker was quickly picked up by the British press to describe the growing share of young adults privately renting, following amounting challenges to enter homeownership (Insley 2011). This perceived tenure shift has been underpinned by narratives around intergenerational injustice, and the premise that overconsumption of housing among older adults is largely to blame for diminished opportunities to buy for later entrants (Willetts 2010). Middle-class millennials, that is, those whom if they were born 20 years prior could have otherwise afforded to buy a home, thus became the voice of “generation rent”, and rising house prices became its linchpin. In this conceptualization, the moral dilemma is financial gain enjoyed by market-insiders, to which market-outsiders – young adults – lose out.

Substantial advancements in the last decade have moved debates far beyond this simplistic framing, and a broader and more nuanced understanding of young adults’ changing housing opportunities has developed (e.g., Coulter, Bayrakdar, and Berrington 2020). Shifts in housing access have been situated within a wider context of political-economic, housing and labour market changes (Byrne 2020), and important variation in housing arrangements within, as well as between, generations has been charted (Mckee et al. 2017; Watt 2020). A growing evidence base has revealed effects of changing arrangements across different domains of life (Flynn 2017; Howard, Li, and Bentley 2023). The adoption of a “generation rent” discourse in scholarly works outside of the UK and the Anglosphere has further broadened conceptions of young adults housing inequalities beyond this relatively homogenous political-economic sphere (e.g., Fuster, Arundel, and Susino 2019), that remains deeply influenced by ideologies of homeownership (Ronald 2008).

Despite a more nuanced academic understanding of young adults’ housing inequalities, the term “generation rent” is still misused and trivialized in the media, and has thus failed to resonate at scale, mobilize in a meaningful way, or gain critical mass. Alternative terms have been used: Hearne (2020) describes “generation locked-out”, whereas Korean researchers have adopted the phrase “N-po generation”, derived from the notions of countless (“n”) things which young people forego (po) due to costs of living (Han, Kim, and Park 2023). Still, no unifying framework has emerged in its place, and there remains a paucity of language to capture the realities of young adults’ contemporary housing arrangements. In response, this paper puts forward seven propositions which seek to synthesize recent evidence and more accurately captured the breadth of young adults housing inequalities, compiling key learnings from the body of work on young adults and housing which has been extensively researched, but seldom unified.

The contributions of this paper are three-fold. First, it challenges assumptions surrounding “generation rent”. The popular media narrative charting how young adults’ overspending on avocado toast prevents them from saving for a home is an example that has trivialized “generation rent” and overshadowed its substantive causes (Levin 2017). Through describing “generation rent” within a broader context of the political economy of (rental) housing, this paper addresses some of the primary misconceptions. Second, this paper expands definitions of “generation rent”, which, at least in its early conceptions, centred around private renters (temporarily) locked out of homeownership. It puts forward a new classification of four sub-categories conspicuous in the often homogenized cohort of young adults, namely “second generation owner”, “delayed buyer”, “tenant” and “precariat”. Third, this paper demonstrates the political salience of “generation rent”, calling into question policy approaches which centre on facilitating homeownership. These responses not only perpetuate a middle-class bias since the beneficiaries are those on the borders of owner-occupation, but they neglect other important factors generating and shaping experiences of “generation rent”, namely social housing decline and rental sector liberalization.

The seven propositions conceived move through the drivers, features, and outcomes of contemporary housing inequalities. They begin by describing contextual shifts in housing and welfare systems and the role of states in driving these shifts. They then outline variation in manifestations of inequalities, between tenures and housing circumstances, socio-economic and demographic groups, and types of rental housing. Some outcomes of these situations are then put into the spotlight, including possible implications for mental health and wellbeing, and the persistence of experiences of “generation rent” beyond early adulthood. This expands the problematization of “generation rent” beyond a housing-wealth issue and reframes it as a wider societal shift with important outcomes for individuals, families and society.

Some of these propositions have been extensively researched, whereas others have been overlooked or disjointed from the main literature. More pertinent, perhaps, is the lack of research unifying them. It is this omission that this paper seeks to address. These propositions are not an exhaustive list, and several equally deserving points fell beyond the scope of this paper. Some factors were excluded because they have been described extensively elsewhere, such as the reduction of homeownership rates in recasting opportunities of younger cohorts (Fuster, Arundel, and Susino 2019; Mckee et al. 2017). Other exclusions simply reflect limited space: parental co-residence was selected to exemplify manifestations of “generation rent” outside of dominant tenure structures, and mental health and wellbeing was chosen as an example of its non-financial outcomes. These were selected from a multitude of possibilities. This paper focuses on class- and income-based disparities. Other socio-demographic characteristics like geography, race and migration background are vital determinants of housing market position which merit much further attention in understanding “generation rent” (Powell and Robinson 2019), but fell beyond the limited scope of this paper. The purpose of these propositions is thus not to comprehensively describe contemporary dynamics of “generation rent”, but to inspire future work to look beyond its conventional boundaries and questions its outcomes beyond its most immediate peripheries.

Drivers of ‘generation rent’

The following section situates “generation rent” within changing housing and welfare systems, addressing some of the primary misconceptions surrounding its drivers. The first misconception is that “generation rent” represents those squeezed out of the owner-occupied tenure. The second is that experiences of young cohorts are a result of overconsumption by older cohorts or investors, or an outcome of their own financial irresponsibility or lifestyle changes. This section describes how government-led transformations of the housing, and later rental housing, sector around more financialised, neoliberal agendas have re-cast young adults housing opportunities and underscored variegated experiences of “generation rent”.

Proposition 1: “Generation rent” is part of broader processes of housing system restructuring

Across public discourse, early narratives largely focused on reductions in owner-occupancy as the primary driving force of “generation rent”. Since this point, it has been increasingly understood that this is just one symptom of the neoliberal restructuring of housing systems that has been set in motion across countries since the late twentieth century (Mckee et al. 2017), redefining housing systems and their uses (Forrest and Hirayama 2009).

The political ambition underscoring these shifts was to encourage individuals and families to provide for their own needs, enabling the stripping back of welfare and state services (Cooper 2017). Expanding homeownership was central in these agendas, and housing policies have over the following decades became geared towards re-positioning this tenure as a primary vehicle for wealth accumulation (Ronald 2008). Mechanisms to achieve mass homeownership focused on expanding the sector through, for example, the liberalization of credit regulations, and disincentivising alternatives by actively reducing rates of social housing (Forrest and Hirayama 2009).

A primary criticism of “generation rent” is that it has analytically neglected reductions in social housing access in “generation rent” framing, both as a viable alternative to homeownership that young adults can aspire to, and a tenure they are increasingly unable to access (Christophers 2018; Watt 2020). Residualisation strategies seeking to reduce the social rental sector and marginalize tenants have included tightening access criteria, selling off existing stock, slowing new building, and demolition – often in the guise of urban renewal (Hochstenbach 2017). Trends in the UK show that in the decade leading up to 2011 when “generation rent” discourse took hold, owner occupancy and social housing reduced in percentage point share to fairly similar degrees (ONS 2011). Oversight of the social housing tenure in “generation rent” narratives both reflects, and perpetuates, an “ideology of homeownership” (Ronald 2008), and overlooks the arrangements of young adults who have always belonged to the renting class.

Effects of residualisation has not only been conspicuous in Anglophone countries (Hoolachan et al. 2017; Waldron 2022), but in continental European countries which had historically higher shares (Musterd 2014). Howard, Hochstenbach, and Ronald (2023) show that reduced shares of social housing have been more influential in explaining private rental growth amongst young adults in Amsterdam than reduced rates of homeownership – with all income groups seeing a drop in social housing that outstripped reductions in owner occupancy rates over the 2010s.

Alongside reduced opportunities for entry, policy shifts enabling short- and fixed-term tenancies amongst those who do gain social housing access is another marker of residualisation that impacts new entrants and young adults in particular. This has predominantly taken place in Anglophone countries (Fitzpatrick and Pawson 2014), but emerged in various forms elsewhere – with Dutch youth and student contracts being two examples of temporary duration regulated housing (Huisman 2016). While older generations could enter social housing and stay put, younger generations must meet tougher criteria for entry, contend less desirable contractual conditions, and compete for limited supply.

In addition to neoliberal shifts towards deregulation and residualisation, there is consensus that the financialisation of housing has further compounded young adults’ choices (Byrne 2020; Kováts 2023). Financialisation is summarized by Aalbers (2017, 554) as “the increasing dominance of financial actors, markets, practices, measurements, and narratives at various scales” with the outcome being a “structural transformation of economies, firms (including financial institutions), states, and households”.

Whilst housing financialised is not recent, it has taken a much stronger hold in private rental sectors following the global financial crisis (GFC), with important implications for younger cohorts who rely most heavily on this tenure (Fields 2018). The GFC undermined the assumed stability of the owner-occupied sector and paved the way for reinvigorated investor-interest in private renting as “a site of intense experimentation for financialized actors” (Aalbers et al. 2021; White 2023, 2). Alongside asset-inflation, private rental housing offers ongoing returns on investment – accelerated in market-liberal policy settings which typically inflict no restrictions on maximum rent extraction and little on rental price increases. In most countries, rental earnings are subject to little or no taxation, and in some countries like Australia tax deductions, largely in the form of negative gearing, substantially support the profitability of even unfavourable private rental investments (Ryan-Collins and Murray 2021). This translates bigger losses to bigger gains, encouraging greater degrees of leverage and risk. Alongside fiscal policies, economic conditions, low interest rates, and buy-to-let mortgage products, which have accelerated across countries in various packages, encourage landlordism amongst (typically older) adults with (housing) wealth to invest. These provide tough competition to (typically younger) adults with limited financial power and little or no housing equity.

Describing this changing landscape, some have argued that rentierism (otherwise termed rentierisation or rentier capitalism (Christophers 2023; Ryan-Collins and Murray 2021)), rather than straight-forward financialisation is the core process reshaping housing opportunities (Adkins, Cooper, and Konings 2021). This denotes the transformed usage of housing from a commodity (bought and sold on the speculative market), to a generator of ongoing income (extracting unearned capital mostly in the form of rent) (Langley 2020; Ryan-Collins and Murray 2021). The result is “monopoly power in the control and exploitation of rent-bearing assets” (Christophers 2023, 424). Adkins et al. (2021) describe how this new “logic” of inequality around asset inflation has increased the salience of housing wealth in social stratification, putting financial gain from housing rents on a par with wages. This further dampens the relative position of asset-poor young adults who struggle to bridge wealth-gaps through salary earnings. Rentierism processes work in a self-reinforcing cycle, pushing up prices across the board and further excluding those without this crucial asset-base (Ryan-Collins and Murray 2021).

These conceptions mark a departure from what was previously understood about the dominant forces shaping class-structures, namely labour production, occupation and its social order (Saunders 1984). Labour market disparities have since been deemed insufficient in explaining contemporary class-stratification, and it is increasingly argued that housing, and more specifically rental housing, underscores the re-stratification of society and explains deepening inequalities between those with housing assets and those without (Adkins, Cooper, and Konings 2021; Langley 2020). There are clear age dimensions to these shifts. Young adults not only have a harder time buying a home and have become locked out from participation in housing and wealth-accumulation practises, but they are increasingly unable to catch up through conventional means, that is, labour. Thus, housing has become recognized not only as an outcome of class-based inequalities, but as a determinant (Forrest and Hirayama 2018).

Making these distinctions about the drivers of “generation rent” is important, since misconceptions about what has caused emergent problems are paired with a misalignment in policies seeking to address them. An overemphasis on diminished owner occupancy in driving “generation rent” has been mirrored by the concentration of policy efforts to facilitate entry for those on the borders – with many countries offering variations of first homeowners grants and subsidies. This focus reflects the deeply entrenched homeownership ideology across high-income countries (Ronald 2008), assuming historically normative middle-class transitions whereby young adults moved from the parental home to homeownership. It has rightly been criticized for doing little to expand credit to excluded groups and lower-income households (Hilber and Schöni 2016), and for coming at the expense of policies addressing issues in social and private rental housing.

Proposition 2: “Generation rent” is state driven

Earlier narratives surrounding “generation rent” have often described a conflict between generations, whereby overconsumption by older generations and investors has unjustly diminished housing opportunities for future entrants. At its most extreme, this has been framed an “age war” (Willetts 2010): older generations with relatively easier access to homeownership and have since capitalized on unprecedented housing wealth gains, and young adults have lost out. Other conceptions have looked to young adults and their irresponsible spending habits as the primary culprits of “generation rent” –most famously encapsulated in the avocado toast media narritive (Levin 2017). These framings overshadow the substantive causes of “generation rent”, and lend to the perception that it is an issue outside government remit and, to some extent, beyond political control.

A growing body of work has emerged describing the state actions taken to assign financial actors greater stakes in housing systems (Aalbers 2017), and incentivize the growing presence of investors in housing markets (Gil and Martínez 2021). This has taken place directly, for example through financial products, and indirectly, for example through policies that make investment increasingly profitable (Fields 2018). This spectrum of state-driven strategies has been conceptualized as a “policy package”: some are explicit, some are harder to discern, but they all feed into the same neoliberal agenda of transforming housing into an attractive asset class (Gil and Martínez 2021).

Despite variation in approaches, governments can be thought of as “regulators, insurers, and guarantors” in these processes (Flynn 2017, 390). Wijburg and Aalbers (2017, 981) describe how the German state appeals to the business models of real estate funds, through “guarantee[ing] rental payments […] thereby reducing a range of risks”. Hochstenbach and Ronald (2020) apply the term “regulated marketization” to describe the Dutch governmental approach which does not simply assign full freedom to the market, but replaces existing regulations with ones that assign market actors more power. Crook and Kemp’s (2019) study of the UK describes straight-forward deregulation, alongside explicit incentives such as build-to-rent subsidies. Despite differences, these policies can be interpreted as support for the market and are thus emblematic of neoliberalism (Gerstle 2022).

Broadly speaking, market-liberal policies strengthen the rights of landlords vis-à-vis the rights of tenants. An example is diminishing minimum rental contract duration to permit tenant turn-over and price increases. This has long been familiar to Anglophone contexts, but more recently witnessed across countries like Spain (Gil and Martínez 2021) and the Netherlands (Huisman 2016), resulting in a rapid infiltration of institutional investors and global capital in housing market contexts where there was previously almost none (Wijburg and Aalbers 2017; Aalbers et al. 2021). Not only has this increased competition for market newcomers who must compete with property-rich buyers, but it has set in motion a more aggressive approach to landlordism (August 2020). Gomory (2022), for example, describes how large-scale landlords in particular deploy tenant turnover as a strategy for profit-making, elevating precarity for rental households.

It is easy to forget that governments can also use their power to redistribute access and halt investors. Christophers (2022) comparative study describes how the Danish government enforced regulation in 2020 as an explicit backlash against the “buy it, fix it, sell it” approach of the institutional investor Blackstone. Regulations included the prohibiting of financial incentives to encourage tenants to vacate a property, and a five-year freeze-period of rent rises after renovation of purchased properties – albeit with exceptions. This serves as a reminder to the value of examining drivers of “generation rent” beyond the Anglosphere. In Anglo-countries, governments typically take an ambivalent approach to regulation, resulting in a diversion of blame to the consumers who monopolize housing stock as a result. A lack of distinction over the policy mechanisms underscoring “generation rent” diminishes state accountability, responsibility, and capacity to drive change.

Features of ‘generation rent’

The following section explores the features of “generation rent”, synthesizing some of the recent evidence to address misconceptions surrounding who or what are implicated in the term. The first misconception is that is that “generation rent” is primarily concerned with young renters struggling to enter homeownership. The second is that the private rental tenure is the assumed destination of the excluded. The third is that reliance on this tenure is necessarily problematic – without attention to context. This discussion describes variations in housing situations between socio-economic groups and housing types, considering young adults who, whilst not renting in the private sector, experience other forms of housing market pressures and exclusions. It then unpacks differences in types of rental housing between housing systems, arguing that experiences of “generation rent” are largely contingent on housing market dynamics and their degree of regulation.

Proposition 3: “Generation rent” represents a diverse cohort

One of the longstanding scholarly criticisms of “generation rent” is that it perpetuates generalizations (Christophers 2018), overlooking differences within generations and beyond private renting. Researchers have issued caution against a generational framing (Rudolph and Zacher 2022), arguing that it risks homogenizing young adults (Mckee et al. 2017) and overlooking the “wide array of different housing circumstances” they experience (Cole, Powell, and Sanderson 2016, 1). Others have argued that the “generation is one sociological factor at work […] alongside others” (Woodman 2022, 61), and a growing literature has unpacked heterogeneity between young adults on the basis of socioeconomic status, geography, household size and type, race and migration background and labour market position (e.g. Coulter, Bayrakdar, and Berrington 2020).

It is now fairly uncontested that experiences in “generation rent” are deeply bound in class – with some arguing emergent inequalities represent a continuation of long-standing socio-economic divides (Byrne 2020). Despite this, it seems the diversity of “generation rent” is somewhat unique to contemporary cohorts in that exclusions from both social housing and owner-occupancy have pushed a broader spectrum of society into the squeezed middle. The private rental sector is thus increasingly composed of high-income and dual earning “prime” households (Howard, Hochstenbach, and Ronald 2023), who increasingly look to renting to balance demands of parenting, careers and social lives in resourceful and culturally rich urban areas they can no longer afford to buy in (Boterman, Karsten, and Musterd 2010). Their position is vastly different from low-income households or housing allowance recipients who, unable to obtain social housing, face the “bottom end” of the private rental market (Cole, Powell, and Sanderson 2016).

Research suggests that low-income households are particularly disadvantaged in the private rental sector, having a harder time securing private rental housing (Hoolachan et al. 2017), relying on informal options like sub-lets and the “black market” (Grander 2021; Gurran, Pill, and Maalsen 2021), facing discrimination, eviction and frequent moves (Cole, Powell, and Sanderson 2016), and for some, experiencing periods of homelessness (Watt 2020). Those who do manage to find private rental housing may rely on undesired shared arrangements (Nasreen and Ruming 2021), be susceptible to higher housing costs (Yates and Milligan 2007), and other suboptimal housing conditions (Bricocoli and Sabatinelli 2016). Whilst a rich literature has added insight into the housing situations of the most marginalized, Roberts (2013) argued that there has been a tendency to analyse the extremes, leading to an analytic neglect of the ordinary groups who fall into the ”missing-middle”. Indeed, middle-income young adults have been found to be the fastest growing group in private rental housing in a variety of contexts (Howard, Hochstenbach, and Ronald 2024; Waldron 2023).

In addition to young adults’ own incomes, recent evidence suggests that parental wealth is increasingly important in asserting young adults housing market position. Facilitating entrance to owner-occupancy through financial gifts and loans (Galster and Wessel 2019), acting as rental guarantors (Köppe 2018), offering co-residence (Coulter, Bayrakdar, and Berrington 2020), and transmitting other forms of social and cultural capital (Nethercote 2019) are channels of parental advantage that have become central in determining housing outcomes. Some have argued that reliance on parents for housing provision is a means of addressing the unequal distribution of housing and housing wealth between generations (Angel and Mudrazija 2011). A more common stance is that it is problematic for inequality, most basically because parents cannot help out to the same extent, and many not at all (Galster and Wessel 2019). A clear tension exists between the redistribution of housing wealth on a household level to mitigate intergenerational divisions in housing access, and the impacts this has on a societal level in terms of exacerbating inequalities.

The renewed nexus between young adults and their parents has been conceptualized as a “re-familialization” (Flynn and Schwartz 2017) or “re-galvanizing” of the family (Ronald and Arundel 2023), emphasizing a return to past arrangements. This is seemingly at odds with neoliberal political ambitions of past decades, where shifts in education, labour and housing markets promoted ideals of individualism and, at least theoretically, weakened ties between family wealth and life chances. Others have argued that this has always been a fallacy. Cooper (2017) describes how the neoliberal rhetoric around personal responsibility is underscored by a binding force between generations, cemented in family debt, which has become central in the economic functioning of the family unit. Kováts (2023) draws on the case of Hungary to demonstrate how an acceleration of family support has been an inevitable reaction to housing commodification. Alongside hindering social mobility and reproducing intergenerational class divides, there is a de-politicizing element to this arrangement. Parental support increasingly takes the place of the state in providing access to housing, sustaining homeownership rates, and offering security. This masks the realities of obtaining decent housing for young adults without this vital resource.

Proposition 4: “Generation rent” extends beyond the private rental sector

Early conceptions often considered “generation rent” as a two-dimensional dichotomy of homeowners and private renters, with exclusions from the former fuelling demand for the latter. This has been contested on multiple accounts with some arguing that this equates homeownership as being the superior tenure and private rental as substandard (Flint 2003). Others point out that it is out of touch with the post-crisis reality which undermines security of owner-occupancy (Smith 2015). Another important criticism is that it overlooks other housing situations young adults experience outside of these primary tenures (Howard, Hochstenbach, and Ronald 2024).

It is widely recognized that housing pathways have become increasingly “chaotic” and multi-faceted (Hochstenbach and Boterman 2015), with a diversification of normative transitions emerging in difficult markets. Informal and illegal housing types, house- and room-sharing, and prolonged parental co-residence seem to have risen. This has taken place in in weakly regulated housing market contexts with small social offerings (Gurran, Pill, and Maalsen 2021; Nasreen and Ruming 2021), as well as in historically regulated contexts which have seen recent trends towards liberalization and residualization (Bricocoli and Sabatinelli 2016; Grander 2021). It is worth noting, however, that these trends are not necessarily representative of struggle, but can also represent ways in which young adults have responded to housing challenges with inventiveness, resilience and agency (Byrne and McArdle 2022; Waldron 2022), drawing on their resources, strengths and privileges to re-strategise (Worth 2021).

Growth in parental co-residence has been witnessed across countries (Lennartz, Arundel, and Ronald 2016), but has only more recently been unified with experiences of “generation rent” (Forrest and Hirayama 2018). Patterning of co-residence along income lines (Iacovou 2010), and increased rates in areas where housing costs are highest (Bayrakdar and Coulter 2018) suggests an association between housing market pressures and staying at home. More recently, research has implied a diversification of co-resident profiles, as a wider spectrum of young adults live at home in the context of a diminished opportunities for residential independence (Howard, Li, and Bentley 2023). For some, living at home can be a strategic choice enabling them better educational and labour market opportunities, or valuable time to save for a deposit (Coulter, Bayrakdar, and Berrington 2020). In this sense, Worth (2021) questions whether co-residence is a form of privilege that provides a financially more appealing alternative to the current housing market. For others, co-residence is necessitated out of constraint, and can increase pressure on already stretched space and resources (Hill and Hirsch 2019).

Concerns over the outcomes of this increasingly necessitated agreement are coming to the fore, with researchers in the US and Australia highlighting associations between co-residence and worsening mental health and wellbeing amongst young adults and their parents (Caputo 2019; Copp et al. 2017; Howard, Li, and Bentley 2023). Like other forms of family support, reliance on co-residence is problematic in that not all young adults can gain access. While some will secure rental housing and find temporary options, the most marginalized renters without the parental home to fall back may be only a few steps away from extreme precarity and experiences of homelessness (Grander 2021; Watt 2020).

This section has demonstrated precarities that extend beyond the private rental tenure, but it is also important to note that even young adults who enter social housing or homeownership can face ongoing precarity. The introduction of short- and fixed-term tenancies in social housing limits duration for those who can gain access (Fitzpatrick and Pawson 2014), whilst marginalized and highly leveraged homeowners are subject to volatility in house prices and interest rates – undermining security (Smith 2015). Tenure transformations, exacerbated following the GFC, have certainly created ruptures in private rental markets and seen a re-direction of residential trajectories into avenues such as the parental home and beyond, but they have also disrupted assumptions that entry into historically “lifelong” tenures of social housing and owner occupancy will a priori secure young adults housing futures.

Proposition 5: “Generation rent” is defined by rental conditions (not renting per se)

The notion of “generation rent” first emerged to describe the changing fortunes of young adults on the British housing market (Insley 2011), quickly becoming associated with private rental standards of countries like the UK, the US and Australia where early conceptions of the term were shaped (McKee 2012). In these countries, few restrictions are placed on landlords, and short-term contracts and uncapped prices are commonplace (Kemp and Kofner 2010). Christophers (2021, 12) argues that assumed Anglophone norms reinforce the assumption that private renting is per se undesirable, “devaluing rental, idealising home ownership, and pouring further fuel on the house-price fire”.

Over four decades ago, Kemeny’s (1981) influential theory of dual and unitary housing systems disputed the superiority of one tenure over another, arguing that tenure imbalances reflect a policy-induced hierarchy. Countries that have imposed stronger regulation have, at least historically, withheld the emergence of housing market conditions symptomatic of “generation rent” (Huisman 2016). In the Netherlands, for example, tight regulations previously restricted the use of the sector for profit-making, reinforced by a large and widely accessible social housing sector that provided tough competition for private landlords (Musterd 2014). As such, the country retained an almost entirely de-commodified private rental sector throughout the late 20^th and early 21^st century, at a time when market actors were becoming prominent in shaping rental markets elsewhere (Hochstenbach and Ronald 2020).

However, as happened in Anglophone countries some decades before, a wider range of countries have recently been subject to revanchism and deeper liberalization in recent attempts to grow the private rental tenure (Kettunen and Ruonavaara 2021). This includes contexts where private rental housing has long been more regulated, like Germany (Wijburg and Aalbers 2017) and Sweden (Wimark, Andersson, and Malmberg 2020). Outcomes for young adults have further seemed to replicate those in the Anglosphere, with the rise of tenure insecurity, unaffordable rents, and waning accessibility witnessed across countries that have historically withstood such conditions (Grander 2021; Huisman 2016).

An important distinction is that private renting is not indicative of inequalities per se. In many countries, rental housing was historically the norm and the surge of homeownership from the late 20th century was the anomaly (Kemp and Kofner 2010). What poses a challenge is the dissolution of rent controls which distort the balance between profitability of landlords and the rights of tenants (Van Gent and Hochstenbach 2020). The concern for the share of young adults in each tenure in “generation rent” has overshadowed more substantive differences between systems and rental types, neglecting the importance of rental regulation in determining the (mis)functioning of private rental systems and the outcomes for inhabitants (Kettunen and Ruonavaara 2021). A failure to make this distinction perpetuates the association of homeownership as the better and more desirable tenure, shunning rental housing as a second-class option (Christophers 2021). This re-asserts an ideology of homeownership, which similarly holds in policy-making where it is assumed that increasing rates are a solution to issues of “generation rent” (Norris and Lawson 2022). This does little to address the fundamental issue at hand, namely liberalization in pursuit of landlord profit, which diminishes chances to rent affordably, securely, or with agency.

Outcomes of ‘generation rent’

The following section describes outcomes of “generation rent”, addressing two common oversights. First, it addresses implications beyond the financial ramifications for cohorts locked out of housing and wealth opportunities, turning attention to mental health and wellbeing. Second, it discusses housing pressures beyond the years of early adulthood, and their outcomes for older cohorts in the long run.

Proposition 6: “Generation rent” has impacts across young adults’ lives and opportunities

Financial implications for young adults locked out of housing and wealth opportunities are central in the problematization of “generation rent”, particularly in countries which have rigorously adopted asset-based welfare models that rely on housing wealth to substitute living costs later in life (McKee 2012). Questions over the future of young adults who have been unable to buy into this crucial asset-base, whilst essential, have overshadowed other important outcomes of young adults’ worsening housing market position – including in relation to mental health.

It is well established that housing is an important social determinant of mental health and wellbeing (Shaw 2004). Research has explored the potential effects of housing affordability (Arundel et al. 2022), housing precarity (Li, Baker, and Bentley 2022), and other housing conditions (Pevalin et al. 2017) in relation to mental health. Not only do young adults often fare worse by these parameters, but they also rent at greater rates – which is often where housing issues and quality problems are concentrated (Baker et al. 2016). It is therefore surprising that few studies have focused on the housing-related mental health outcomes of the younger cohort specifically.

Associations between housing and wellbeing have been a more common theme throughout “generation rent” literature. The neoliberal rhetoric around the successful homeowner and the flawed renter (Flint 2003) seems to continue to play an important role in shaping young adults’ self-perceptions (Mckee et al. 2017). Home ownership is often perceived as an important marker of success, morality, responsibility, and the “right” way to pursue life course markers such as parenthood (Ronald 2008). Self- and societal stigma has been described amongst those falling short of this attainment (Gurney 1999).

This has been hypothesized as one explanation for negative associations between co-residence and mental health in recent US studies (Caputo 2019; Copp et al. 2017). Supporting this hypothesis, Nauck and Ren’s (2021) cross-country analysis finds that the wellbeing implications of co-residence are intensified in contexts where it is not commonplace. Howard, Li, and Bentley (2023) Australian study also shows that negative associations between co-residence and mental health are more extreme in social groups where living with parents was previous less common: adults over 30 years of age seem to fare worse compared to younger cohorts, whilst also having seen the steepest increase in co-residence rates.

Alongside associated stigma, there has been increased attention to the conditions experienced within the private rental tenure and their psycho-social implications for young adults. Particularly in economically liberal countries where rent regulations are weak, renters may experience (perceived) lack of autonomy, loss of confidence and self-esteem, and a compromised sense of ontological security (McArdle and Byrne 2022), remaining in a state of transition and being unable to settle or make a home (Hoolachan et al. 2017; Waldron 2023). These constraints impact other areas of lives – for example limiting single parent’s ability to care for children in unstable accommodation (Watt 2020), or disrupting family life and constraining fertility choices (Flynn 2017). Some groups may be particularly susceptible to the psycho-social effects of instability – like families and migrants who either face a heightened need for security or diminished a capacity to secure alternative arrangements.

Ample evidence suggests housing affordability stress further compounds mental health and wellbeing, with recent research by Arundel et al. (2022) revealing that poor mental health amongst young adults experiencing housing affordability stress was substantially worse than older age cohorts facing the same conditions. At the same time, the share of young adults in housing affordability stress was much higher. Housing affordability stress often necessitates young adults to make trade-offs in their living arrangements. House sharing past the point where is it desirable (i.e. in student and younger years), particularly in “stranger shares” or room shares are one conspicuous outcome of high-priced housing markets (Nasreen and Ruming 2021). This has important implications for young adults’ – disrupting routines, threatening safety, diminishing ontological security, and likely impacting mental health (Nasreen and Ruming 2021).

Proposition 7: “Generation rent” extends beyond early adulthood

In its early conceptions, “generation rent” was associated with people in their late teens to their early to mid-30s who became active players in housing markets since the early 2000s. The assumption was that progression through early careers and entry into dual-income partnerships would secure young adults’ housing market position. However, labour market precarity, stagnating wages and the restructuring of the economy around (housing) assets – making it harder to catch up simply through labour – disrupt this notion (Adkins, Cooper, and Konings 2021). Young adults’ diminished financial power is paired with high rent burdens, meaning they pay too much in monthly housing costs to save for a deposit and become stuck “on the housing treadmill” (Han, Kim, and Park 2023).

Across countries, the private rental tenure is no longer a short-term stop-off for the young and the mobile, as a growing share of households see the sector “become their de facto tenure of destination” (Hearne 2020; Watt 2020, 129). Where some countries offer security of tenure that supports feasibility of private renting in the long run (Kemp and Kofner 2010), other countries lack strong rent regulations. Those facing long term private renting in the bottom end of weakly regulated markets are in a fundamentally different position to temporary renters facing delayed access to homeownership. Further, the impacts of instability also take on a different hue as young adults progress through the life course to start families, bring up children, and enter older age.

Long-term social and economic pressures on those private renting into old age has garnered much scholarly concern – made more salient by the rising age demographic in the tenure (Morris 2011). Exclusions from wealth accumulation opportunities, experiences of precarity and displacement, and the burden of housing costs after retirement are challenges that “disrupt opportunities for ageing well and ageing in place” (Bates et al. 2020, 1442). Indeed, older private renters are particularly vulnerable to housing affordability stress as they age out of their period of economic engagement (Morris 2011), raising concerns over ongoing psycho-social impacts of living precariously. Particularly in countries with ageing populations which have vigorously adopted asset-based welfare strategies, it remains unclear how governments will provision for the growing share of households facing “asset-poverty” and a lack of state-support (Colic-Peisker, Ong, and Wood 2015). What is clear is that rental policy has simply failed to keep up with the changing role of the tenure, as it transforms to a long term or even lifelong destination serving an increasingly diverse population of families and older adults (Kemp 2015).

Another outcome of recent housing market pressures, against a backdrop of broader economic and social changes, has been the pulling together of generations to mitigate a challenging housing market (Galster and Wessel 2019). There are substantial differences between households in their ability to provide support. Forrest and Hirayama (2018) distinguish three family types: In “real estate families” or “accumulating families”, housing acts as liquid assets that can be deployed across generations. “Dissipating families” are in a less advantageous position and likely need to draw on their own housing assets to provide intergenerational support. “Perpetual renter families” are those without any property to draw on. For parents with lower incomes, less savings and without housing wealth, offering support is particularly problematic in that it is likely to necessitate trade-offs in later life. (Re)mortgaging property, downsizing and using savings, income or retirement funds are strategies applied by parents to release equity and support their adult offspring (Humphrey and Scott 2013). Concern over these trade-offs is underscored by diminished state support and pension provision, leaving households reliant on their own (housing) resources into old age (Castles 1998). Thus, while some older adults face ongoing instability themselves, others must grapple with ways to redistribute their own homes and resources to mitigate their offspring’s housing stresses.

Discussion

Bringing together evidence from fields including housing and urban studies, political economy, demography, and stratification sociology, this paper has put forward seven propositions which unpack some of the drivers, features and outcomes of young adults’ changing housing opportunities and address some of the contradictions commonly associated with “generation rent”. Synthesising some of the recent evidence, these propositions carve out a nuanced picture of a more diverse, pervasive and complex notion of “generation rent” than has historically been depicted in its early conceptions.

What does ‘generation rent’ tell us about young adults’ changing housing market positions?

Why do clarifications about “generation rent” matter? This paper has illuminated some of the ways that ambiguities surrounding “generation rent” have opened up the term for generalization and misuse, overlooking variations in experiences of young (and older) adults across contexts, housing types, and socio-economic groups. In some ways, “generation rent” is much wider than is conventionally understood, and at least three groups are distinguishable within the composite term.

“Generation delayed buyer” are its poster child. For this middle-class cohort, entry into homeownership is still eventually in reach but has become contingent on career progression, the formation of dual-income households, or accessing parental wealth. Many will face high mortgage burdens necessitating trade-offs in other areas of life. This group demonstrates an extension of housing market pressures beyond marginalized groups to those who have, at least historically, been much further away from the edge. Nevertheless, understanding the breadth of “generation rent” requires looking beyond these experiences.

“Generation tenant” concerns those in lower socio-economic brackets who likely would always have been, and probably always will be, renters. This group is not untouched by recent housing pressures but has been displaced from affordable and secure housing in the social and private rental tenures. Their destination is a more financialised private rental market, where they are likely hit particularly hard by high housing costs, insecurity, and challenges in access. For some households, “generation tenant” will be a persistent state, and the social and economic implications of this state will likely intensify with age.

“Generation precariat” describes a growing group of young adults who, either by choice or lack thereof, live outside of the primary tenures, including in the parental home, in informal, temporary or illegal (sublet) accommodation or, in the most extreme cases, experience homelessness. “Generation precariat” are not equally disadvantaged, but most experience variations of precarity, disruption and a life on hold. Whilst these destinations are primarily temporary for all but the most marginalized households, the psycho-social implications of these situations may have more pervasive effects.

In other ways, “generation rent” is narrower than depicted, in that not all young people lose out. Alongside these three groups are “second generation owner”, the children of affluent and asset-rich parents. “Second generation owner” share more in their parents’ opportunities than in “generation rent” struggles, and can call on various resources to facilitate homeownership, or in the interim, a good rental home. Indeed, whilst the poorer young adults may be poorer, the richer are also richer (Gruijters, Van Winkle, and Fasang 2023), and this trend is likely to continue as younger cohorts continue to see a trickledown effect of their parents’ assets and (housing) wealth. There are, of course, young buyers without rich parents, but the capacity to “make it on your own” has diminished (Humphrey and Scott 2013).

These categorizations are somewhat simplistic. There is variation within these categories, and many situations not captured in these terms. They do, however, emphasize four primary sub-groups within the frequently homogenized “generation rent”, who experience very different contemporary conditions, as well potentially diverse outcomes across their lives and livelihoods. At the same time, despite notable variation within “generation rent”, these categorizations highlight that most young adults have experienced a deterioration of opportunities compared to their relative position two decades prior. An exception is “second generation owner”, although their unique advantage is contingent on the intergenerational transmission of housing wealth, and thus embedded in processes around “generation rent”. While housing is both shaped by, and shapes, socio-economic position, class therefore seems not to explain everything. A generational lens illuminates political-economic shifts and their impacts for contemporary housing inequalities. When harnessed usefully, a “generation rent” framing can expose, rather than conceal, new castings of longstanding class-divides.

What does ‘generation rent’ tell us about wider transformations of housing systems and their impacts for socio-economic inequalities?

Another core objective of this paper has been to demonstrate how “generation rent” is emblematic of broader transformations in the political-economy of housing, and more recently rental housing, which deepen existent inequalities and drive new patterns of socio-economic re-stratification. Indeed, the past four decades have seen housing shift from an equalizing mechanism to a lever through which wealth has become more concentrated (Arundel and Ronald 2021; Christophers 2021). Most agree that this follows the neoliberal agendas which set in motion from the 1980s but intensified in the post-crisis period, notwithstanding geographic variation (Forrest and Hirayama 2009). The most conspicuous manifestation of these shifts may be opportunities for increased housing consumption by “market-insiders”, and the widening gap between “insiders” and “outsiders”, with the latter facing decreased opportunities to buy into the market and gain from its associated social and economic benefits (Arundel 2017).

It has increasingly been recognized that housing is not simply an outcome of inequality but, more critically, a driver (Adkins, Cooper, and Konings 2021). This follows the restructuring of housing markets around a more financialised model (Byrne 2020). Some argue that “rentierisation” (Christophers 2023; Ryan-Collins and Murray 2021) is a more useful framing in understanding the new political economy of housing. New modes of class-stratification (that is, through housing assets) compound age-based inequalities in particular, since it become harder for young adults without this asset base to catch up. At the same time, inherited wealth (or lack thereof) further carves out disparities in wealth and housing between young adults (Langley 2020).

It is amongst younger cohorts that the functioning of housing systems in these changing macro-economic climates are most visible: they are more residentially mobile, and often do not possess the social and economic buffers of older adults. They are thus an important cohort put contemporary housing issues on the political stage. Researchers have pointed out that the growing size of private rental tenures has led to increased representation of renters amongst the voting population, and questioned whether persistent growth would find form in a “re-politicization of renting” (Byrne 2020; Hochstenbach 2023; Kemp 2023). This seems not to have materialized in most countries, and debates around housing inequalities have failed to gain a critical mass. One explanation is that the selective politicization of “generation rent” around middle-class groups has had an overall depoliticizing effect, undermining class-based arguments and making the term broadly unappealing.

Whilst the focus on middle-class young adults is inaccurate and problematic on multiple accounts, it is illuminative that only when housing market pressures extended beyond marginalized groups and the middle class began to struggle did the housing crisis come to substantial public attention. While “generation delayed buyer” – the historical posterchild of “generation rent” - are thus an important subgroup, “generation tenant” and “generation precariat” face deeper precarity and disadvantage. Offering a more nuanced depiction of housing inequalities and their unequal effects between socio-economic groups is a crucial step to for these groups to take the baton in future discourse surrounding “generation rent” and, more importantly, in policy efforts that address it.

Conclusions

This paper began by unpacking the drivers of “generation rent”, considering how wider shifts in housing and welfare systems, and their political-economic drivers, have dampened housing opportunities for younger cohorts. It has gone on to address “who” or “what” questions, highlighting variation between young adults, conceptualized as “second generation owner”, “delayed buyer”, “tenant” and “precariat”. It addresses outcomes of these trends, exploring possible implications for mental health and wellbeing, and describing the persistence of experiences of “generation rent” beyond early adulthood. This expands the problematization of “generation rent” beyond a housing-wealth issue and reframes it as a wider societal shift with important outcomes for individuals, families and society. It thus offers an important avenue to politicize fundamental issues of current times.

Notwithstanding, the propositions covered are not exhaustive, and a substantial number of drivers, features and outcomes of “generation rent” have not been addressed. Precarisation of labour markets, post-crisis mortgage lending restrictions and increasing interest rates, and life course changes in, for example, family formation and childbearing are just a few examples. Further, where socio-economic disparities have been a focus of this discussion, there are also crucial intersections between other subgroups. Understanding differences between races, household types and geographies is particularly important in describing variations of “generation rent” beyond a hegemony. Lastly, it should be noted that these propositions have been considered in a western context, drawing mostly on literature from the UK and other Anglophone and continental European countries. Empirical and conceptual insights from across a greater variety of countries, societies, and systems would add further nuance. These propositions should thus be questioned, built upon, and tested in different contexts, generating a better understanding of variations of “generation rent”, and the political-economic contexts which shape this variation.

Acknowledgments

The author would like to thank Richard Ronald and Cody Hochstenbach for their support in the writing of this manuscript and in the years prior, during which the themes of this paper were developed.

Disclosure statement

No potential conflict of interest was reported by the author.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by the Australian Research Council [DP190101188].