New report warns only well-off will be able to afford to buy a home in the UK

Taylor Scott International News

Only the wealthiest of the next generation will be able to buy a home if current trends continue in the UK, according to a new report from the National Housing Federation. It shows that first time buyers now have to pay, in real terms, 10 times the deposit needed in the early 1980s as well as earn more, borrow more, and rely more on family wealth than even a generation ago. The average first time buyer today needs a £30,000 deposit, and has an average income of £36,500compared to the average salary for first time buyers in the 1980s of £20,000. A first time buyer has to borrow 3.4 times their annual income on average, compared to first time buyers in 1979 who needed to borrow just 1.7 times their income and two thirds of first time buyers receive financial help from parents, a figure that has doubled in five years. As a result home ownership is being pushed out of reach of average earners including nurses, firefighters and plumbers. And with the number of home owners falling and first time buyers not getting considerably older, it indicates that the pool of those buying homes is shrinking to those with the greatest wealth. The struggle younger generations face is being felt across the country. In separate polling by YouGov on behalf of the National Housing Federation almost 80% of people in England think it’s harder to own a home now than it was for their parents’ generation. Eight out of 10 people polled also didn’t believe any of the main political parties would effectively deal with housing. Younger people whose parents can’t help financially, can find themselves stuck living in their childhood bedrooms or paying high private rents that make it almost impossible to save. The National Housing Federation also highlights that fewer first time buyers in the future could slow down the wider housing market and make it harder for ‘second steppers’ to move up the ladder. ‘With the high salary, and huge deposit younger generations now need to buy even a modest home, home ownership is quickly becoming an exclusive members club. Sadly, it will depend on the wealth of the family you were born into as much as your own hard work,’ said David Orr, chief executive of the National Housing Federation. ‘We’ve found that eight out of 10 people don’t believe any of the main political parties will effectively deal with housing, but they still have the chance to put that right. With a bold long term government plan for house building our housing crisis is solvable. We desperately need politicians from all sides to commit to ending the housing crisis within a generation,’ he explained. Continue reading →

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