Andy Burnham, Keir Starmer’s successor in waiting, gave his first major policy speech on Monday, vowing to oversee the “biggest council house building program since the postwar period” using “public land, vacant public land to reduce costs”. The promise came as economic trends quietly deteriorated, but the issue that has anchored Britain’s economic discourse for decades — housing — continues to exacerbate burdens for young people in particular.
Burnham himself seemed acutely aware of the stakes. “If you’ve not got control of housing,” he said last September, “you’ve not got control of the costs the country is facing.” Yet by any sensible measure, the housing price growth that marked the 2010s and early 2020s has come to an end. Nominal prices have been broadly flat nationally for nearly three years. London flat values have dropped more than 5% in 12 months, and two in five new-build buyers in the capital who sold in 2025 did so at a loss. HM Land Registry’s index shows real prices have fallen 12.4% from their 2021 peak.
“Young renters in London and South East spend over half their income on housing as real prices fall 12.4% from 2021 peak.”
Would it be so bad for this trend to continue? The cost of renting and homeownership in Britain is unusually high in international comparison. According to the English Housing Survey, private rental households spend on average 39% of pre-tax income on rent, with the poorest fifth paying 63% even after housing support, up from 56% in 2019-20. The latest OECD data show one in four UK households paying more than 40% of disposable income on housing — nearly four times Germany’s 6.7%, and significantly higher than Greece, Italy, and Portugal.
The cohort most exposed is young people under 35 in London and the South East, who routinely spend over half their gross income on rent. Meanwhile, headline and youth unemployment rates stood at 4.9% and 16.2% respectively in April, with recent estimates suggesting an additional 2.5% of the working-age population has taken up out-of-work benefits since 2018. Graduate and entry-level hiring is being reined in, and vacancies have fallen below pre-pandemic levels. As the energy shock from the Iran war works through the system, the Bank of England expects inflation to climb above 3% in the summer, keeping pressure on sterling, gilt yields, and already strained household budgets.
The current political mood in Britain makes it easy to lose sight of these underlying trends. But for the young people who face spending half their income on rent while real house prices fall, the property dream has become an economic nightmare — and no amount of GDP growth can obscure that.