Within ten years 90% of low income under 35’s will never be able to afford to buy a home
A new analysis by thinktank The Resolution Foundation, has found that the current hosing problems facing young first time buyers is not going to improve unless some drastic action is taken. They suggest that nine out of every ten Britons who are considered to be on modest incomes, at 10% to 50% of the national average wage are the ones who may never be able to afford to buy a home.
Resolution revealed that 25% of the 16 to 34 year old making up the group bought their own homes in the period between 2013 and 2104, compared to the year 1998 when over 50% were able to do so. What the thinktank is now predicting however, is that this will soon fall to around 10% and by the year 2025 it will have fallen to only 5% in London.
Resolution chief economist Matt Whittaker also revealed that it now takes typical first time buyers with a modest income about 22 years to raise enough money to put down as a deposit on a home. It the 1990’s it would have taken the same group just three years, today clearly putting home ownership compete out of reach. If these young first time buyers is ever going to get onto the housing ladder, then drastic action is going to be needed by government.
The Help To Buy has been hailed as a success, rightly many believe, but those households that have benefitted have incomes of more than £40,000, the only way groups on lower incomes, if they are to benefit will have to see a significant boost in the housing supply. When the data from the Department of Work and Pensions family resources survey was analysed, it revealed that home ownership had declined and renting in the private sector by young people had doubled. In London the figures show that in the year 1998, the number of people in the under 35’s age and on modest incomes, 22% were renting; this figure has grown to 53% today.
A third of all homes here are now owned by people aged over 65 years, in the under 35 year group this falls to just 10%, a fall from 19% in 1998. It can be seen that home ownership is on the decline in the UK and has been doing so since the turn of the century, now standing at about 63% today.