LONDON/MADRID: From buying a single bedroom in a shared flat to pooling mortgages with friends, young Europeans are turning to unconventional housing arrangements as property prices continue to outpace incomes across the continent.

Startups and developers are rolling out creative solutions aimed at first-time buyers who have been squeezed out of traditional homeownership. But these models also underscore the severity of Europe's housing crisis, particularly for younger generations.

Over the past decade, house prices in the European Union have risen 10 percent faster than incomes, according to European Commission research. The burden has fallen most heavily on young people, who face soaring rents and limited access to affordable homes.

In Spain, where the rise of short-term holiday rentals has aggravated housing shortages in Madrid and Barcelona, startup Habitacion.com sells individual bedrooms in shared flats for up to 80,000 euros (US$95,200) — roughly a third of the cost of a one-bedroom apartment in similar areas.

The company said it sold 200 rooms last year and has a waiting list of 32,000 people, with listings in seven cities.

Founder and CEO Oriol Valls said the concept responds to financial pressures and shifting lifestyles.

"People no longer get married, or if they do, they get married but don't have children ... or they do it much later," he said. "They require much smaller living spaces that are also much more affordable."

Prospective buyers complete compatibility questionnaires, covering habits such as whether they wash dishes after meals, before being paired with co-owners or renters. Buyers must use personal loans rather than mortgages and resell through the company.

Alvarez, a potential buyer who declined to give his first name, said Habitacion.com offered to help him secure a 10-year personal loan at six percent interest, about double the typical mortgage rate, but he ultimately could not find a suitable room in Madrid.

He said the model could suit young people with limited savings, but "loses all appeal if I can't live with my partner."

In Britain, London-based developer Fairview offers a "Buddy Up" program that connects friends with brokers and solicitors and contributes up to 2,000 pounds ($2,726) toward legal fees if they purchase property together.

Meanwhile, banks in Britain, France, Germany, and Italy have revived low or zero-deposit mortgages, which largely disappeared after the 2008 financial crisis. Though these loans often carry higher costs and require stable incomes, they provide an option for renters struggling to save for a down payment.

Natalie and Martin Walker from West Yorkshire said receiving an eviction notice when their baby was one month old prompted them to take out a zero-deposit mortgage last year after four years of renting.

"The sense of stability that it brings you, that's the biggest delight for me," Natalie said.

Some renters are also turning to property investment to offset housing costs. Carlos Sempere, a 36-year-old industrial engineer in Madrid, where central flats can sell for around 1 million euros, purchased a rental property in southern Spain through investment firm PropHero.

"Either it helps me pay the rent, or I sell it in the future," he said.

For smaller budgets, PropHero offers fractional stakes in rental buildings in Spain and Ireland starting at 20,000 euros.

Patricio Palomar, head of alternative investments at AIRE Partners, said the proliferation of such schemes reflects worsening affordability.

"All these housing solutions serve to show how people are getting poorer."