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Home ownership for British young families becoming more of faraway dream

Xinhua, December 22, 2016 Adjust font size:

Home-hunters in London need to save every penny of their salary for 15 months, just to raise a deposit to buy a house in the capital, a report revealed Thursday.

The report, by the Local Government Association (LGA), exposes the growing problems for home ownership, revealing that the proportion of 25-year-old homeowners in Britain has more than halved in 20 years.

New analysis for the LGA reveals almost half (46 percent) of all 25-year-olds owned their home 20 years ago. In a generational shift, only 20 per cent of 25-year-olds have managed to climb onto the housing ladder today.

An analysis for the LGA by estate agents Savills, reveal that just 6,550 social rented homes were built in 2015/16, a drop of 88 per cent from 20 years ago when 56,950 were built.

On average, people in privately rented homes now pay 34 percent of their total household income on rent, while those in social and affordable rented accommodation pay 29 percent.

In comparison, homeowners pay an average of 18 percent of their total household income on their home mortgage loans.

The LGA said: "Average house prices are now at 7.9 times average earnings. The average size of a deposit needed to get a mortgage is 62 percent of annual income, in London it is 131 percent."

The LGA, which represents more than 370 councils in England and Wales, warns a drop in social and affordable rented homes is combining with rents rising above incomes to make it more and more difficult for people in Britain to get on the housing ladder.

The association says 4 million working people will need access to some type of affordable housing even if the country achieves full employment by 2024.

In advance of the Government Housing White Paper due to be published next month, the LGA's Housing Commission, set up last year to explore new ways to boost housebuilding, has set out more than 30 recommendations on how local and national government can work together to solve the nation's housing challenges.

Cllr Martin Tett, LGA housing spokesman, said: "A shortage of houses is a top concern for people as homes are too often unavailable, unaffordable and not appropriate for the different needs in our communities.

"The housing crisis is complex and is forcing difficult choices on families, distorting places, and hampering growth," he added. Endit