Home ownership rates among 25-year-olds have plummeted by more than half in 20 years, council leaders warn today.
New analysis for the Local Government Association reveals almost half (46 per cent) of all 25-year-olds owned their home 20 years ago. In a generational shift, only 20 per cent of 25-year-olds are on the housing ladder today.
With access to housing to buy increasingly limited to future generations, the LGA insists homes for affordable or social rent are vital to help more families afford to save up for a deposit to buy a home.
Instead, new analysis for the LGA by estate agents Savills, reveals:
· 6,550 social rented homes were built in 2015/16. This is a drop of 88 per cent from 20 years ago when 56,950 were built in 1995/96.
· On average, private renters now pay 34 per cent of their total household income on rent and social and affordable renters pay 29 per cent.
· In comparison, homeowners pay an average of 18 per cent of their total household income on their mortgage, and those that own outright have no housing costs.
· Average house prices are now at 7.9 times average earnings. The average size of a deposit needed to get a mortgage is 62 per cent of annual incomes, 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 to get on the housing ladder.
As a result, the proportion of total homeowners of all ages across the country has fallen by 4.4 per cent since 2008 while private renters increased by 5.1 per cent.
Alongside building more social rented homes to boost home ownership and a renewed effort to increase the incomes of those in need of affordable homes, council leaders say there is also an urgent need to better provide housing for older people.
Between 2008 and 2039, 74 per cent of projected household growth will be made up of households with someone aged 65 or older. An increase in age-friendly housing will be crucial to helping older people stay healthy and happy for longer, and reducing demand on NHS and care services.
In advance of the Government’s Housing White Paper, the LGA’s Housing Commission, set up last year to explore new ways to boost housebuilding, is today setting out more than 30 recommendations for how local and national government can work together to solve the nation’s housing challenges.
Cllr Martin Tett, LGA housing spokesman, said:
“Our figures show just how wide the generational home ownership gap is in this country. 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. But there is a huge opportunity, as investment in building the right homes in the right places has massive wider benefits for people and places.
“There is no silver bullet and everyone must come together to meet the diverse housing needs in our villages, towns and cities. The Government’s Housing White Paper is an opportunity to boost housing supply and affordability. It must recognise that a renaissance in housebuilding by councils will be crucial to helping ensure the mix of homes to rent and buy that are affordable for those people that need them.
“This means powers and funding given to councils to replace sold homes and reinvest in building more of the genuinely affordable homes our communities desperately need.
“But our focus is beyond just bricks and mortar. The Housing Commission sets out how council housebuilding can help deliver homes but also help families boost their household incomes, create prosperous and successful places, and improve the health and quality of life for our ageing population.”
