Home ownership amongst 25-year-olds has plummeted by more than half in the last 20 years, and the cost of renting is preventing people from purchasing, according to new analysis for the Local Government Association (LGA) conducted by
Savills.
On average, private renters now spend 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.
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 per cent. 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.
Only 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.
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.
Commission's recommendations
Over 30 recommendations have been put forward to central government within the LGA’s final Housing Commission final report. See ‘
Building our homes, communities and future’.
