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Rising property prices across Europe have outpaced income growth, forcing younger generations to adopt unconventional housing strategies. Spanish startup Habitacion.com sells individual rooms in shared flats, pairing occupants through compatibility tests, while British developers promote mortgages for friends buying together. Low or zero-deposit mortgages are returning in multiple EU countries, and investment platforms like PropHero let tenants buy stakes in rental properties to offset costs. Experts say these trends underscore how young Europeans are increasingly priced out of traditional home ownership, highlighting both the severity of the housing crisis and the adaptability of buyers.
A Spanish startup is now selling bedrooms in flats shared with strangers, while in Britain, some developers are offering mortgages designed for friends buying together. Elsewhere, tenants are investing in stakes of rental properties to help cover housing costs. These unconventional approaches underscore the struggles young Europeans face as traditional home ownership becomes increasingly out of reach. Advertisement
Over the past decade, house prices across the European Union have risen 10% faster than incomes, according to research by the European Commission, placing significant pressure on younger generations. Although the European Commission announced plans to improve housing affordability last December, these measures are yet to be implemented, prompting startups and developers to explore alternative ways for people to gain a foothold in the market.
In Spain, housing shortages in cities like Madrid and Barcelona have been aggravated by a surge in short-term holiday rentals. Habitacion.com, a Madrid-based startup, now sells individual rooms for up to 80,000 euros (USD 95,200), roughly one-third of what a one-bedroom flat would cost in the same areas. The company reported selling 200 rooms last year and currently has a waiting list of 32,000, offering listings across seven cities.
Founder and CEO Oriol Valls explained that the company addresses both financial pressure and changing lifestyles, noting that people are marrying later, having fewer children, or not at all, which creates demand for smaller, more affordable living spaces. Prospective buyers complete compatibility questionnaires covering habits such as washing dishes and relationship status, which help pair them with co-owners or roommates. Purchases are made through personal loans instead of mortgages, and resale must go through the company.
One prospective buyer shared that Habitacion.com had assisted him in obtaining a personal 10-year loan from a regional bank at 6% interest, roughly double the typical mortgage rate. However, he could not find a suitable room in Madrid and noted that the arrangement loses appeal for those who want to live with a partner.
In London, developer Fairview offers a Buddy Up program, connecting friends with brokers and solicitors while providing up to 2,000 pounds (USD 2,726) toward legal fees if they buy a property together in the capital or surrounding areas. Across Britain, France, Germany, and Italy, banks are also reintroducing low or zero-deposit mortgages that disappeared after the 2008 financial crisis. These products often involve higher costs and require stable, high incomes but provide an option for those unable to save for a down payment.
Natalie and Martin Walker from West Yorkshire, northern England, shared that receiving an eviction notice when their baby was just a month old led them to take a zero-deposit mortgage last year after four years of renting. Natalie said that the stability it offered was the biggest relief for them.
Back in Spain, Carlos Sempere, a 36-year-old industrial engineer, cannot afford central Madrid properties, which sell for around 1 million euros. Instead, he invested in a rental property in southern Spain through PropHero, an investment platform. Sempere explained that the investment either helps him pay rent or could be sold in the future. PropHero allows investors to buy stakes in rental apartment buildings in Spain and Ireland starting from 20,000 euros.
Patricio Palomar, a real estate consultant and head of alternative investments at AIRE Partners, observed that market conditions are so challenging that first-time buyers often overlook legal complexities and higher costs associated with new schemes. He added that these approaches reflect how affordability pressures are affecting young people, effectively reducing their purchasing power.
Source Reuters
5th Jun, 2025
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