The home is a fundamental asset for households and has traditionally been a mechanism of protection against a fall in income. In this report, we analyse the extent to which social needs are met in this ambit, structuring the discussion around three sub-aspects or basic challenges:
Firstly, the ability to access a home without making an excessive financial sacrifice;
Secondly, the fact that existing homes should offer occupants decent and adequate conditions;
Lastly, energy poverty that affects health and social integration must be prevented.
The information obtained shows that the most serious problems (such as late rent or mortgage payments that potentially lead, if repeated, to eviction) affect only a small proportion of the Spanish population, though they were more common during the financial crisis. In addition, the cost of housing remains a very serious problem for some social groups, which have to allocate a significant percentage of their income to it. In the case of young people, the high cost of housing, be it rented or owned, contributes to keeping them in the parental home for longer.
1. First challenge:
Access to housing
The financial sacrifice households had to make to purchase a home in 2017 was less than that required during the period of upward price pressure in the property market, when prices reached their highest levels. However, an average family (with an average income) would still need at least six years to be able to purchase an ordinary home at current prices, presupposing that they allocated all their annual disposable income to this (which no-one can do, but this hypothesis is used to construct the indicator). This figure is two years more than the four experts regard as a prudent financial sacrifice. The difficulty of accessing housing is much greater for households in the lowest income distribution bracket (first quintile): these families on modest incomes would take over 16 years to purchase a home, even if they were to allocate all their disposable income to this.
The rental market offers an alternative to purchasing a home and many families opted for this following the start of the financial crisis, when it became more difficult to get loans. However, home rental costs have shot up in recent years, making access to housing even more difficult. Data published by real estate portals such as Idealista show that prices rose by 18.4% in 2017.
In reality, experts advise that no more than 30% of monthly income should be allocated to purchasing or renting a home. Figures show, however, that spending on housing absorbs a higher percentage than this of many families’ disposable income: over a fifth of the Spanish population live in households overburdened by the cost of their housing, which exceeds more than 30% of their income. And almost half of the population states that payments associated with their home represent a heavy financial burden.
YOUNG PEOPLE’S ACCESS TO HOUSING
It is especially difficult for young people (aged under 35) to access the housing market, be it by either renting or purchasing a home.
A young person renting a home in 2017 had to spend 40% of their household’s disposable income in order to access the rental market. For young people aged under 25, this percentage rose to 44% of their income. If we look at average rents on real-estate platforms such as Idealista, we can see that households headed by a young person aged under 35 need to spend over half of their disposable income on housing. In the case of young people aged under 30, the cost of their rent represents almost 70% of their income.
In the case of home purchases, the fall in prices since 2009 has meant that the number of years needed to buy a home (bearing disposable income in mind) has fallen, though the time taken still remains longer than is advisable and is much longer for young people than for those aged over 34.
EVICTIONS AND HOMELESSNESS
In 2017, the number of households that lost their homes rose to 60,754 (0.05% of the population): 22,330 for non-payment of their mortgage; 35,666 for non-payment of their rent; and 2,758 for other reasons. Even though the problem of evictions has tended to decline in recent years, the number due to inability to pay rent rose in 2017 due to the considerable increase in rents in Spain.
Housing prices, the economic crisis and the lack of specific protection policies has resulted in an increase in the number of homeless people in the last decade. In 2016, there were 16,437 people who, on average, had to turn each day to homeless shelters for accommodation, a rise of 50% since 2006.
2. Second challenge:
In addition to the ability to access a home, it is essential that this home should be decent. In other words, it should meet the minimum conditions for people to be able to live satisfactorily in it. The basic sanitation facilities in the home – bath or shower and WC – are to be found in virtually all Spanish homes. Consequently, this basic need is by and large met.
In contrast, far more people are affected by housingrelated problems to do with structural shortcomings or inadequate maintenance (such as damp and leaks or the lack of natural light). Though overcrowding is less widespread, it should be noted that approximately 5% of the population suffer from this, as they live in homes that do not have the number of bedrooms required to provide sufficient living space and privacy for the members of the household. In a third of these cases, overcrowding goes hand in hand with another housing-related problem, meaning that, according to the European definition, they suffer severe housing deprivation in this respect.
Even though the indicators on housing conditions showed improvements prior to the financial crisis (and even in some cases during the early part of the crisis), there have been no observable advances in recent years. One possible reason is that some of the problems require investment, the effects of which can only be perceived in the medium term.
POOR PEOPLE LIVE IN THE SMALLEST HOMES
According to the data gathered in the most recent Household Budget Survey, 8% of the population live in homes that have less than 15 m2 per household member, double the percentage in 2008. Living in such small spaces is more common in urban areas (9.4% in towns and cities with a population of more than 100,000) than in the countryside (6.1% in municipalities with fewer than 10,000 residents). However, it is a problem that is suffered first and foremost by poor people. In 2017, it affected almost a quarter of people on incomes in the bottom decile (as opposed to just 2% of people with higher incomes). During the financial crisis and at the start of the recovery, this problem became even more acute for people on the lowest incomes.
3. Third challenge:
Meeting domestic energy needs
Energy poverty means that households lack the financial resources needed to meet their domestic energy needs (such as gas, electricity or heating) due to their low income, the cost of utility supplies or their home’s poor energy efficiency. In Spain, this problem has worsened since the start of the financial crisis, as energy prices rose sharply while at the same time many people lost their jobs and family incomes fell. Even though this situation has improved in recent years, late utility bill payments, disproportionate spending on energy and insufficient income (lower than the IPREM, an income indicator used for means-testing purposes) after paying domestic gas and electricity bills are more common today than they were in the years prior to the start of the financial crisis.
Late payment of utility bills is particularly serious because it can lead to supplies being cut off, an undesirable situation from a social point of view. Despite measures put in place in recent years to combat energy poverty, 2% of the population had to do without some source of energy due to financial problems in 2016 according to the Living Conditions Survey (LCS).