
A Spanish startup is selling bedrooms in apartments shared with strangers; a British developer is offering mortgage loans to friends who want to buy together; while investing in share ownership of rental homes is helping some renters cover their housing costs.
These unusual deals highlight the extreme efforts that some young Europeans are willing to make to cope with the housing crisis, which has hit them harder than anyone else.
Over the past decade, house prices in the European Union rose 10% faster than incomes, according to European Commission research, and all indications are that young people feel this pressure more than anyone else.
While plans announced by the EU executive in December to make housing more affordable have yet to take shape, some businesses are offering innovative ways to enter the increasingly challenging property market.
A room for 80,000 euros
In Spain, where the housing shortage in Madrid, Barcelona and other major cities has been exacerbated by the rise of short-term vacation rentals, the company Habitacion.com is offering individual rooms for up to 80,000 euros. That's about a third of the price of a one-bedroom apartment in a similar area.
The company stated that it sold 200 rooms last year and has a waiting list of 32,000 people.
Offers for singles on a limited budget
Founder and CEO Oriol Valls says his firm offers a solution to financial pressures. Official figures show that average Spanish wages have risen by 26% in the past decade, while property prices have risen by 81%.
“People are not getting married anymore, or if they are getting married, they are not having children…or they are having them much later,” he said. “They are looking for much smaller living spaces that are also much more affordable.”
Buyers must complete compatibility questionnaires (whether they have partners or whether they wash dishes after meals) to be paired with co-owners. They must also use personal loans instead of mortgages.
“Buddy Up” schemes and no-deposit loans
In London, developer Fairview has a “Buddy Up” scheme, connecting friends with brokers and lawyers to buy property together. Meanwhile, banks in Britain, France, Germany and Italy are bringing back low- or zero-deposit mortgages, which disappeared after the 2008 financial crisis, Reuters reports.
Natalie and Martin Walker from northern England revealed that an eviction notice when their baby was just one month old prompted them to take out a no-deposit loan last year.
“The feeling of stability it gives you, that's the greatest joy for me,” Natalie said.
Investment as an alternative
For those who can't afford to buy an entire property, PropHero offers share ownership in rental buildings in Spain and Ireland for just €20,000. Carlos Sempere, a 36-year-old engineer in Madrid, bought a rental property in southern Spain because houses in Madrid (around €1 million) were out of his reach.
“Either it helps me pay the rent, or I will sell it in the future,” he said.
Ultimately, it is the difficult market conditions that force first-time buyers to look beyond the legal complexities. As consultant Patricio Palomar puts it: “All these housing solutions serve to show how people are getting poorer.”