Housing affordability pertains to the capacity of a given household to pay their rent or mortgage in relation to their financial means. Considering the criticism of the concept when viewed as a strict ratio rule between income and housing expenses (Hulchanski, 1995), it may be useful to focus on the relational nature of the concept and as a way to analyze the relationship between different processes. As Whitehead (2007, p. 30) contended, affordability is a composite of three main parameters: (1) housing cost, (2) household income and (3) direct state interventions (or third-actors) playing on the previous two factors, for instance by improving one’s capacity to pay through direct payments or by reducing housing costs through subsidized housing. Considering the current trend towards unaffordability in European cities (Dijkstra and Maseland, 2016, p. 96), the concept is particularly useful to understand the interplay of factors that both favour rising housing costs—through financialization (Aalbers, 2016), gentrification (Lees, Shin and López Morales, 2016), and entrepreneurial urban policies (Harvey, 1989)—with those that enable the stagnation of low- and middle-incomes, namely Neoliberal globalization (Jessop, 2002) the precarization of work and welfare policy reforms (Palier, 2010). The “hard reality” behind one’s home affordability can therefore be construed as the result of a complex interplay between large-scale processes such as those enumerated above, behind which lie the aggregated behaviours of a multitude of actors; from the small landlord to the large investment firm seeking to speculate in global real-estate markets, from the neighborhood association protecting tenants from evictions to national governments investing (or divesting) large sums of money into housing programs. The conceptual strength of affordability lies in its capacity to scrutinize a wide range of complexly interconnected phenomena, which ultimately affect greatly everyone’s quality of life.    

In Europe, increasingly longevity is driving the trend towards an ageing population . Furthermore, at a global level, average life expectancy has increased over the last fifty years from 58.6 years in 1970 to 72.7 years in 2019 (World Bank, 2021), and could reach 76,6 years by 2050 (Statista, 2021). In the literature reviewed, “older people“ are described as the population aged 65 and over (Harper et al., 2016; Johnson, 2015). A recent UK study (Harper et al., 2016) found that the average age of the UK population exceeds 40 years for the first time in history. The same study predicts the working age group of older people, which makes up the population aged 50-66, will increase from 26% in 2012 to 34% in 2050, an increase of 5.5 million people. However, longevity is not usually accompanied by an understanding of the quality of living. The increase in the elderly population is overwhelming the health care system of the modern welfare state. The elderly are becoming more dependent on health services, while the support of younger generations is decreasing due to their increased occupational mobility and different lifestyles (Bađun & Krišto, 2021). Asset-based welfare could be defined as a set of policies and measures that address and promote individual wealth accumulation over the course of our lives in order to reduce an individual's dependence on the pension system through the consumption of that asset (Lennartz & Ronald, 2016). There could be many forms of asset-based welfare, and it should be oriented toward the local context. For example, asset-based welfare is embedded in the housing market in Japan, Singapore and South Korea (Doling et al., 2013); (Oh & Yoon, 2019). Retirees in the US or the UK are more likely to finance a reverse mortgage, while retirees in post-socialist countries are more likely to enter into care exchange contracts or an intergenerational transfer. In the post-socialist countries of Eastern Europe, most pensioners are homeowners who have high assets and low monthly income (Kunovac, 2020). For pensioners who became homeowners during their working years, there are a few ways to use their homes in order to secure a higher standard of living in retirement. There are two main scenarios for using your assets to increase the standard of living: one is to move out of the current home, either by downsizing or selling it; the other does not require moving and usually involves renting part of the home or entering into a financial transaction such as a reverse mortgage or insurance contract (Bađun & Krišto, 2021). Both scenarios represent asset-based welfare, as assets (rather than income) are used to increase well-being. In the past, asset-based welfare used to be practised in traditional rural communities when elderly people without successors contracted with their neighbours to provide for them in exchange for their family assets. The European financial market for asset-based welfare is at an early stage of development and is only available to a limited extent in the UK, Spain, France and Germany (Bađun & Krišto, 2021). In other countries, there are different forms of transaction in play. For example, according to a survey carried out by the European Commission, 86% of the Croatians prefer to take care of their parents, rather than having their parents sell their property to increase their income (Bađun & Krišto, 2021).  Similar results could be found in other post-socialist countries with a high level of “familialism”, i.e., intergenerational living with strong family ties (Eggers et al., 2020; Sendi et al., 2019; Stephens et al., 2015) , and homeownership, where the idea of “consuming” the equity to pay for old-age care is unpopular. According to (Kerbler & Kolar, 2018), the Slovenian pensioner, even if starving, would rather not sell or mortgage their homes, while according to Sendi et al., (2019) pensioners in Slovenia “strongly reject all equity release products”. A potential model of asset-based welfare that could be implemented in Croatia was presented in 2015 in the policy document “Social picture of the City of Zagreb” (CERANEO, 2016). This model would represent an innovation in social welfare by creating an institutional support for a contract through which the assets would be transferred to the city after the death of the person and in return the city would provide care for the elderly. This contract would ensure adequate care for the elderly and provide the city with a housing stock for public or social rental. In addition, this type of contract would be a viable alternative to the current practise of doing business under a "lifetime support contract" or a "support contract until death". In 2021, 1,300 such contracts were concluded, but in practice this is not well regulated (Annual report of the Ombudswoman of the Republic of Croatia, 2021). There have been cases of contracts between only one individual providing services to tens of benefactors. Many of these contracts end up contested by the surviving family in court, making this type of transaction risky (CERANEO, 2016).

Financial wellbeing is an emerging concept with valyrious definitions, many of which focus on the financial capabilities of individuals. A household's financial wellbeing encompasses its capacity to comfortably meet current and ongoing financial responsibilities, fostering a sense of security about future obligations while enjoying the ability to make life choices (Aubrey et al., 2022). Riitsalu et al. (2023) describe it as "feeling good about one's personal financial situation and being able to afford a desirable lifestyle both now and in the future" (p.2). Brüggen et al. (2017:229) frame it as "the perception of being able to sustain current and anticipated desired living standards and financial freedom." This perception highlights the robust link of financial wellbeing influencing human wellbeing, which is a combination of "feeling good and functioning well" (Ruggeri et al., 2020:1). Other terminologies are used interchangeably to describe financial wellbeing, including financial health, financial resilience, and financial freedom (Riitsalu et al., 2023).     In the UK, the public health sector cares to raise awareness of financial wellbeing due to its impact on households' health and populations' productivity. On their official website page on Financial Wellbeing, they used the definition by The Money and Pension Service (Gov.UK, 2022: online) as follows:   "Feeling secure and in control of your finances, both now and in the future. It's knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future."   These explanations and the terminology used, including "afford" and "sustain," underscore the interconnections between financial wellbeing and the vital components of household life. These components encompass mental health, productivity, and pursuing economic sustainability in the present and future. Therefore, a household's financial wellbeing is pressured by various housing-related factors, including the costs of renting or buying and non-housing costs like utility bills and repairs, all of which can affect the household's income.   The issue of rising housing costs directly undermines financial wellbeing. This trend can be attributed to several factors, including increased construction costs, labour shortages, and rising material prices (Brysch & Czischke, 2021). Furthermore, there is a notable shortage in affordable and social housing supply (Emekci, 2021; Gov.UK, 2022). This scarcity is partly due to decreased public investment in new dwellings (Housing Europe, 2021; OECD, 2020). This issue further burdens low-income households who face high private rental costs and a gradual reduction in housing benefits (Tinson & Clair, 2020).   This issue also leads many households to cut back on essential needs. For instance, interviews with social housing residents in Scotland with low to modest incomes revealed a tendency to prioritize rent payments over other necessities, such as food and heating (Garnham et al., 2022). Similarly, Adabre and Chan (2019), , citing Salvi del Pero et al. (2016), warned that:   "Households who are overburdened by housing cost may cut back on other important needs such as health care and diet. Besides, in the medium term, households may trade-off costs for lower quality housing such as smaller size of rooms and housing in poorer locations which lack better access to education and other social amenities. The latter has often been cited as the cause of residential segregation."   Another financial burden is non-housing costs involving energy costs for heating (AHC, 2019; Stone et al., 2011). According to Lee et al. (2022), this issue persists, contributing to financial strain and even excess winter deaths in the UK. Poor housing quality raises energy bills (AHC, 2019; Lameira et al., 2022). It presents the risk of considering dwellings as affordable due to local authority support focusing on housing costs alone (Granath Hansson & Lundgren, 2019), regardless of its quality impacting energy bills (OECD, 2020). Social housing residents, particularly the ageing population and those living in poverty are at increased risk of fuel poverty (Tu et al., 2022). Fuel poverty occurs when more than 10% of a household's income goes towards energy consumption for heating (Howden-Chapman et al., 2012).   Looking forward, two factors could continue burdening households’ financial wellbeing. One factor is the fluctuating energy prices that are often increasing, such as the case in the UK (Bolton, 2024). Another factor is the impact of climate change, leading to colder winters and the potential for overheating, increasing energy demand during extreme weather conditions, as warned by the Committee of Climate Change in the UK (Holmes et al., 2019).   Non-housing costs associated with extensive housing repairs can also impact household financial wellbeing, which may arise from several factors. For instance, selecting low-quality construction materials, workforce or equipment to reduce construction costs might lead to increased repair costs over time (Emekci, 2021). Hopkin et al. (2017) highlighted a related issue in England, where new housing defects were believed to be partly attributed to the building industry's prioritization of profitability over customer satisfaction. Another factor could be improper periodic maintenance, potentially accelerating the physical deterioration of the dwelling (Kwon et al., 2020). Additionally, dwellings may fall into disrepair due to unresponsive maintenance services from housing providers, and residents may lack the financial means to cover repair costs themselves (Garnham et al., 2022).     Financial wellbeing is closely tied to household income. Low-income households are particularly vulnerable to being burdened by rising housing costs (Housing Europe, 2021; OECD, 2020), leading to financial insecurity (Hick et al., 2022). In addition, they might suffer housing deprivation due to the increasing housing and non-housing expenses coupled with their declining incomes (Emekci, 2021; Wilson & Barton, 2018). The financial pressure due to low income is further exacerbated if a household member has a disability or severe illness, potentially consuming up to 35% of their income (AHC, 2019). Recently, the COVID-19 pandemic period highlighted households' financial wellbeing vulnerability to housing-related financial challenges (Brandily et al., 2020; Hick et al., 2022; National Housing Federation, 2020). During this period, job losses led to difficulties covering housing and non-housing costs, with a third of low-income social housing residents burdened by housing costs (OECD, 2020).   The issues discussed above on dwellings being of poor quality or unaffordable harm financial wellbeing, leading to residential segregation (Adabre & Chan, 2019; Salvi del Pero et al., 2016) as well as intensifying gaps of social injustice, health injustice, poverty, and fuel poverty (Barker, 2020; Garnham et al., 2022). Without addressing those housing-related issues, many households' financial wellbeing would remain vulnerable to economic insecurity even if they live in housing considered to be "affordable" in terms of rent-to-income ratio.