Housing affordability and poverty in Europe: On the deteriorating position of market renters

Abstract

There are growing concerns about housing affordability throughout Europe. Recent studies by Housing Europe and the OECD have suggested that we are witnessing a generalised deterioration in housing affordability, while other studies point to worsening housing affordability for specific groups, such as renters or low-income households. The aim of this paper is to explore trends in, and incidences and determinants of, housing affordability in a comparative European context over the period 2010 to 2018. To do this we analyse data from the EU Statistics on Income and Living Conditions survey. We examine trends across different measures of housing affordability; examine its association with a variety of socio-economic characteristics and explore country-level differences in housing affordability problems. Our study finds that despite claims of worsening housing affordability, affordability measures show little sign of generalised deterioration over the period in question but that risks of affordability problems have become more concentrated on market renters during this period. At the country level, we find that gross domestic product (GDP) per capita and the at-risk-of-poverty rate are associated with housing affordability problems both between countries as well as within countries over time, while housing allowance coverage and rent regulation stringency are associated with affordability problems between countries.