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Rising property prices across Europe are forcing buyers, especially younger households, to explore unconventional housing options. Data from the European Commission shows that home prices have grown about 10% faster than incomes over the past decade, worsening affordability. In Spain, individual bedrooms in shared apartments are being sold for up to 80,000 euros, while UK developers are promoting co-buying schemes. Banks in several countries have also reintroduced low and zero-deposit mortgages. These shifts reflect deep structural supply shortages and financial stress across European housing markets.
Housing affordability across Europe has deteriorated steadily over the past decade, with property prices rising roughly 10% faster than incomes, according to data from the European Commission. The gap has made homeownership increasingly difficult, particularly for first-time buyers who are facing high down payments, rising borrowing costs and limited housing supply in major cities. Advertisement
In Spain, the pressure is visible in cities such as Madrid and Barcelona, where supply shortages have been intensified by the growth of short-term tourist rentals. In response, a local startup has introduced a model that allows buyers to purchase individual bedrooms within shared apartments. These rooms are being sold for as much as 80,000 euros, which is roughly one-third the price of a one-bedroom apartment in similar locations. The company reported that about 200 rooms were sold last year and that tens of thousands of people remain on its waiting list. Buyers typically rely on personal loans instead of traditional mortgages and must complete compatibility checks before moving in with other co-owners.
In the United Kingdom, alternative buying structures are also emerging. A London-based developer launched a Buddy Up scheme to help friends purchase homes together, offering to cover up to 2,000 pounds in legal fees. The initiative is aimed at reducing upfront transaction costs, which often delay purchases for young buyers who are otherwise financially stable but lack sufficient savings.
Banks in the UK, France, Germany and Italy have also started reintroducing low-deposit and zero-deposit mortgage products that largely disappeared after the 2008 financial crisis. These loans come with stricter lending criteria and, in many cases, higher interest rates. However, they provide an entry point for households unable to accumulate large deposits due to high rents and living expenses.
Individual cases underline the scale of the challenge. In northern England, a couple opted for a zero-deposit mortgage after receiving an eviction notice, viewing ownership as a way to secure long-term stability. In Spain, a 36-year-old engineer who found central Madrid property prices nearing 1 million euros beyond reach chose instead to invest in a rental property in southern Spain through a digital investment platform. Some platforms allow individuals to purchase fractional stakes in rental buildings starting from 20,000 euros, offering exposure to property without requiring full ownership.
Property analysts note that these arrangements are not driven by lifestyle trends but by necessity. High construction costs, limited land availability, slow planning approvals and sustained demand in urban centres continue to restrict supply. At the same time, wage growth has not kept pace with property inflation, leaving younger households with fewer traditional pathways to ownership.
The growing acceptance of shared ownership models, fractional investments and revived mortgage structures indicates that Europe's housing imbalance is becoming structural rather than temporary.
Source Reuters
5th Jun, 2025
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