June 25, 2024

Housing Finance Development

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EU agency warns of looming housing crisis in Europe

SARAJEVO, Bosnia and Herzegovina

Housing costs in the European Union are causing despair, anxiety, and financial burdens, with many young people unable to leave their homes, according to a new report from an EU agency.

Renters in the private market are the most affected, but other types of housing tenure are impacted as well, said Eurofound, which works to assist in the development of social, employment, and work-related policies.

Policy actions in line with the European Pillar of Social Rights – a set of documents containing 20 key principles and rights aimed at building a fairer Europe – and the use of Recovery and Resilience Facility (RRF) funds could help prevent and address these issues, the agency said.

The costs for renters have risen while homeowners’ costs have decreased, the report said, adding that private renters are facing insecurity, with almost half considering leaving their accommodation in the next three months due to affordability.

They report lower quality accommodation at higher rental or purchasing prices, with issues such as energy efficiency and lack of space being more common for renters than homeowners or social housing tenants, it added.

The report found that housing problems extend beyond private renters. Homeowners with variable-rate mortgages are facing increasing interest rates and rising living costs, as seen in countries like Poland where demand for mortgage support has surged.

Even those who own their homes struggle with housing-related expenses such as utility bills, with up to 24% at risk of poverty in some countries, it said.

The report also revealed that many citizens in the 27-member bloc cannot afford to keep their homes at a suitable temperature due to poor or limited energy efficiency options and rising financial strain, with at least 15% affected in several countries.

This comes at a time when homelessness is on the rise across Europe, according to the European Pillar of Social Rights Action Plan, European institutions, EU governments, and civil society.

The report urged policymakers to address the housing crisis in a systematic manner while highlighting the difficulties in providing housing or assistance without raising prices, particularly for those who are ineligible for benefits.

Increasing the supply of quality housing can help, but addressing the issue on multiple fronts is necessary, it said.

Access to debt advice and prevention measures, according to Eurofound, can help prevent financial strain and ease the EU’s rising housing crisis.

To reduce energy dependence, investments in energy efficiency should target low-income tenants and homeowners, it suggested, adding that housing support must be integrated with social benefits and services, with stable and independent housing provided for the homeless, and the implementation of the European Pillar of Social Rights is crucial for addressing Europe’s housing situation.

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