Why young Spaniards take longer than other Europeans to leave home

For the research branch of the Spanish bank BBVA, improving the employment situation of young people, increasing the supply of housing and legal certainty are the lines of action needed to facilitate access to renting among young people in Spain, according to its study 'Measures to encourage renting and help young people to emancipate'. Spaniards are known for living with their parents for longer than average, so how many young people live with their parents in Spain? We have the details on why young Spaniards take longer than other Europeans to leave home. 

When do Spaniards leave home?

Young Spaniards emancipate at the age of 30, almost 3 years later than the European average, and older than the age that would correspond to their income level. The main reason for this delay is the difficulty of accessing housing at a reduced cost and in a location that meets the preferences of recent graduates, as stated in the report released by BBVA research.

Renting is usually the preferred option for this population group, although not necessarily the cheapest, as in 2020, a Spanish household spent, on average, 30% of its disposable income on rent, according to the data cited in this study.

In addition, young Spaniards are more exposed to job and wage insecurity, which means that around 65% of people aged between 15 and 34 still live with their parents. The employment situation means that young people have an income around 13% lower than that of households aged between 25 and 54, and also below the levels of neighbouring countries.

Low wages and high rent in Spain

What is the biggest problem for young people in Spain? When it comes to accessing rented housing, young Spaniards find that prices consume a large part of their salaries. Except in Ciudad Real and Teruel, in the rest of the provinces young households have to spend more than a third of their average household income on rent, as BBVA Research warns in its study.

Added to this is the fact that the increase in demand has not kept pace with the increase in supply and the scarcity of social rental housing stock, with only 1.1% of the total stock, a far cry from the 30% in the Netherlands or the 20% in Austria and Denmark. In these three countries, more than 80% of the population has access to social housing stock.

The high rental prices in Spain today mean that only 3.3% of households pay below market rent, which would be equivalent to social rent.

BBVA Research notes in its study that in recent years there have been "significant legislative changes" that have had an impact on rental supply. Among them, rent control stands out, with effects such as a reduction in supply, higher rents, deterioration of the residential stock and the proliferation of parallel markets; measures against large landlords, which "is a brake on the professionalisation of a highly fragmented market"; and legal uncertainty, which leads owners to keep their properties empty.

Improving the employment situation and housing supply

BBVA Research considers that in order to facilitate young people's access to renting, the first condition must be job stability, with a reduction in temporary employment in the first years of their careers. In this sense, the Spanish bank values the impact of the latest labour reform in Spain, which has allowed "the growth of permanent contracts to be more pronounced among young people under 25 years of age".

"This can reduce labour turnover, improve productivity and, therefore, lead to an increase in the wage income of young people and a reduction in the effort to access housing", the report points out.

From the point of view of housing supply in Spain, BBVA Research argues that the stock of social housing, with 1.1% of the total in 2010, should approach 7% in the coming years in order to reach the average of the Organization for Economic Cooperation and Development (OECD). This would mean achieving just over 1.8 million social housing units, around 1.5 million more than at present.

The construction of new housing also implies increasing the budget for this purpose and boosting public-private partnerships, together with a rethinking of urban planning and greater use of existing land. Moreover, for BBVA Research, the arrival of European funds "is an opportunity to finance the construction of new rental housing that complies with environmental sustainability criteria".

Among the solutions to improve the supply of housing in Spain, this study also advocates acting on empty homes, since according to the 2011 Population and Housing Census, there were 3.4 million empty homes in Spain. However, not all of them are located in places where there is demand.

BBVA Research proposes in this document to "establish a clear definition of vacant housing and quantify them in municipalities with tensions of demand and their proximities" and to create a body responsible for "promoting solutions to bring empty homes back into use in the cities with the greatest pressure of demand". Again, European funds may provide an opportunity to rehabilitate these properties before they are put on the market.

Tax reductions for landlords when tenants are young people with limited resources is another of the measures cited in this study to respond to rental demand, although it proposes raising this reduction to 100%.

Finally, BBVA Research defends the need to establish "a stable framework that attracts investment" and removes the "regulatory uncertainty" of recent years. This will give security to landlords, to speed up the resolution of conflicts, and to companies, avoiding penalising landlords with several properties.