Home ownership rates among 25 year olds in England and Wales have plummeted by more than half in 20 years, according to new research.
Some 46% of all 25 year olds owned their home 20 years ago but now only 20% are on the housing ladder, the analysis from the Local Government Association shows.
The research also shows that the proportion of total home owners of all ages across the country has fallen by 4.4% since 2008 while private renters increased by 5.1%.
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.
The research also shows that on average, private renters now pay 34% of their total household income on rent and social and affordable renters pay 29%. This rises to 51.5% of incomes for private renters when deducting state financial support and 41.7% for social renters.
In comparison, home owners pay an average of 18% of their total household income on their mortgage and those that own outright have no housing costs.
The research highlights the problem young people having affording the costs needed to buy.
Average house prices are now at 7.9 times average earnings but the average size of a deposit needed to get a mortgage is 62% of annual incomes and in London where prices are much higher it is 131%.
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.
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 some 74% of projected household growth will be made up of households with someone aged 65 or older and the report says that 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.
‘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,’ said Martin Tett, LGA housing spokesman.
‘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,’ he explained.
‘There is no silver bullet and everyone must come together to meet the diverse housing needs in our villages, towns and cities. The some to be published Government’s Housing White Paper is an opportunity to boost housing supply and affordability. It must recognise that a renaissance in house building 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,’ he pointed out.
‘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,’ he added.
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