The State of Housing in the EU 2015








Housing Europe President 

It’s been already seven years since the beginning of the financial crisis and as you will see for yourselves over the next pages the state of housing in the EU hasn’t gotten much better. For all of us working for the public, cooperative and social housing sector the figures presented by our Observatory should work as an alarm bell that will make us work harder both at European and at national level to provide every person in the continent, if possible, with a decent, affordable and safe home.

Housing is the
foundation for people’s lives and their priority among their needs. We should make sure that it becomes a priority for policy makers, too.

I see three major challenges for us:
• Guarantee cities which are accessible and affordable for all
• More sustainable, efficient and decentralised energy
• And neighbourhoods where people feel secure and where they can reach their full potential.

Through housing and accompanying services – the hardware and the software – we can ensure stable and affordable housing markets; we can drive the energy transition in the housing sector; we can fight social segregation in urban and rural regions. We already do! Housing Europe members as well as many other housing associations across Europe have already committed themselves to the values and practices of Responsible Housing, paving the way for a better future economically, environmentally and socially.

Demographic changes – and their impact on health services – will pose major challenges in many regions. Further urbanization of Europe must be beneficial to all households, including those with lower incomes.

Social, public and cooperative housing providers must be seen as part of the economic strength and welfare of the EU. It will be essential for EU policies and regulation
to recognize these forces and ensure suitable financial schemes are available in member states.

EU decision making is still too remote for the average EU citizen. That is why I would expect EU institutions to open themselves to the needs of people and shorten the distance between Brussels and European citizens.

Organizations such as Housing Europe have an important role to facilitate this as connector between local needs and
EU policies.

…I would expect
that they open
to the needs
of people
and shorten
the distance
to EU institutions






Housing Europe Secretary General

Too often housing reports and policies show a lack of regard for the fact that housing markets are not limited to individual private ownership and private rental. People rent their homes from municipally- owned housing companies, they own or rent housing in buildings run by not-for-profit or limited-profit housing cooperatives and have a ‘one member – one vote’ say in the management of their homes and surroundings, they own homes on land managed by community land trusts (CLT), they live in shared-equity housing provided by housing association, they rent from housing associations which by law involve them in all decisions affecting their homes and communities. The activities of these housing providers are not always limited to housing but often include home care and support services for residents with specific needs, additional services like kindergartens, community centres, employment and training services, financial advice, neighbourhood services, management of other types of ‘sheltered’ accommodation, energy renovation, urban development and urban regeneration.

This diversity of models and tenures and activities has its roots in different histories and traditions but is driven by a common objective: to meet the demand for affordable, quality homes and neighbourhoods. Having a home, this basic pre-requisite for taking part in society, is something which now is out of reach for a growing number of Europeans highlighting the need to again mobilise all resources to expand existing solutions and come up with new ones.

EU policies have an increasing impact on housing but often reveal a blind spot when it comes to the diverse housing needs and the diverse responses in place and those now required around Europe as well as the advantages this diversity offers society, the environment and individuals.

There is a need for European policies which recognise and respect this diversity where it exists and fosters it where it does not, thereby contributing to the common objective. This requires a coherent, constructive informed approach at EU level, something which is not yet a reality.

Country Profiles and Cross-Country Analysis

The first part of the 2015 edition of the State of the Housing in the Union builds upon the Housing Europe Observatory’s 2012 Housing Europe Review ‘The nuts and bolts of European social housing systems’ aims to address this policy blind spot by describing the different housing systems country by country with an additional cross-country analysis of the latest trends and changes to the housing systems, highlighting in particular the on-going impact of the crisis and efforts being made- or not- by Member States to address housing shortages and homelessness.

Also included are summaries of additional housing research and studies including those produced by the United Nations Economic Committee for Europe Housing and other European networks.

EU Policy updates – challenges and opportunities

The second part describes a selection of the EU regulations and funding opportunities of relevance for housing. This covers the EU Investment Plan, the EU Cohesion Policy which identifies areas of relevance for EU financial support: energy efficiency measures in housing as part of the lowcarbon economy, housing as a social infrastructure and urban regeneration. The European Social Fund and the Employment and Social Innovation Programme.

The regulatory measures covered in this section include the European Energy Union which is setting the EU policy scene for the coming years, the European economic governance mechanism through which member states receive country specific recommendations on their housing systems from EU authorities, EU state aid legislation through which the European Commission has influence on the scope of provision of social housing and EU procurement laws which regulates the tendering practices for large contracts.

Inspiring Innovation

The report also includes highlights of initiatives promoting innovation and exchange on tackling energy poverty with new refurbishment solutions and local solar energy production in social housing, innovative approaches to combining housing and social support and the responsible housing campaign & awards which promote the state of the art in responsible housing and corporate social responsibility.


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The financial crisis had a strong impact in the short term on the housing market of almost all European countries, notably with the exception of Germany, that saw as a result of the ‘shock’ lower construction rates, less transactions, a decrease in house prices.


What we see today, 6 years into the crisis is a very different picture. As the European Commission highlighted in its last Alert Mechanism Report, ‘In 2013, housing markets became more heterogeneous across the EU. […] This widening of the distribution reflects the fact that the market in most Member States has already bottomed out while others are expected to do so only in the coming years’. If in ‘vulnerable’ countries such as Greece, Cyprus and Slovenia house prices continue falling, Ireland is an exception in that house prices have begun rising again after the sharp fall during the crisis. On the contrary in Sweden and in the UK house prices are increasing although they were already relatively high. Elsewhere, for instance in Denmark and in Germany recovery from past falls and/or low prices have triggered increases. This also applies to Estonia and Latvia, the only two countries that in 2013 had a year on year increase in deflated house prices over 6%. For an overview of house prices dynamics across the EU and worldwide:

• Standard & Poor’s (2014). Economic Research: Europe’s housing markets may be on a slow path to recovery
• OECD Focus on house prices
• IMF Global Housing Watch

Compared to 2007, the number of building permits per 1,000 inhabitants contracted in all countries, excluding Germany, albeit at different paces: it decreased by less than half in Belgium, Czech Republic, France, Poland and Sweden, whereas the contraction exceeded this threshold in Denmark, Hungary, Ireland, Portugal and Spain.

The 2015 Alert Mechanism Report points out that ‘Residential investment remains at subdued levels, particularly in Member States where corrections are still running their course. While in some cases this reflects the overinvestment of a few years ago (e.g. Spain), in others, it is related to general economic uncertainty, impaired credit supply and demand, and regulatory bottlenecks’.

For data on construction activity in Europe:

• FIEC (2014) Construction activity in Europe

High construction costs have an impact on the capacity to supply affordable housing in a number of countries, notably Sweden where construction costs are the highest in the EU.

The price level index presented in the chart below provides a comparison of countries’ price levels with respect to the EU average: if the PLI is higher than 100, the country concerned is relatively expensive compared to the EU average, while if the index is lower than 100, then the country is relatively inexpensive compared to the EU average (see Chart 1).

The average EU 27 total outstanding residential loans to GDP ratio has continued increasing since the information became available: from 43% in 2004 to 52% at present. The total outstanding residential debt to disposable income of households ratio has also increased dramatically from 66.4 in 2004 to 81.8% in 2012. The countries with the highest levels of mortgage debt are the Netherlands, Denmark, the UK, and Sweden (see Chart 2).

Nevertheless, the crisis has strongly impacted mortgage lending. According to the European Mortgage Federation ‘gross residential lending in the EU27 in 2012 stood at only 45.8% of the amount recorded in 2007.

However, these figures concealed diverse growth dynamics at country level.’ Two groups of countries can be identified: one with national mortgage markets where gross lending has followed a positive or stagnant trend between 2007 and 2012; the other composed of countries where gross lending has moved along a downward trend over the same period. The first group includes Belgium and Sweden, as well as Denmark and France. The second subclass contains Hungary, Ireland, Italy, Portugal, Spain and the UK.

Although contrary to the other countries of the group, in the UK the trend has not been downwards since 2009.

To learn more about trends in mortgage lending:

Owner occupied dwellings today still represent by far the most widespread form of occupation in the EU. Nevertheless, in many countries recent dynamics have started to encourage an increase in rental housing compared to the past. While during most of the 90s and 2000s sustained house price growth coupled with relatively low interest rates and policies favouring homebuyers led to an increase in home ownership, today less people can afford to buy a home and/or would rather rent due to mobility reasons.

Data from EU SILC shows that indeed the distribution of population across tenures saw an increase in tenants and a decrease in owner-occupiers since 2007 in the EU 15. On the contrary, overall the share of owner occupiers has continued to increase in the New Member States with a parallel decrease in the share of people renting (see Chart 3).


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The State of Housing 2015

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