Young home ownership falls to record low, data suggests
28 December 2015
- From the section UK Politics
The percentage of young people in the UK who own their own home is at its joint lowest level since 1996, according to data obtained by Labour.
It suggests 44.9% of 20 to 30-year-olds are homeowners – the last time it fell to this level was in 2013.
It comes as economists predict strong property price growth in 2016.
The Royal Institute of Chartered Surveyors expects prices to increase by around 6%, while rents will see a 3% annual rise.
The rises are being driven by demand for new homes outstripping supply, Rics said, with other experts predicting even bigger rises in certain property hotspots outside London.
Labour’s figures, which include shared ownership and are based on analysis of Labour Force Survey figures, show home ownership among the under 30s reached its peak in 1999, when it was 62.7%.
It has been in steady decline since then, with the biggest falls coming after the 2008 financial crash.
Just 32.5% of young people had bought their home with a mortgage or loan in 2015, compared with 51.4% in 1999.
There has been a slight increase in the number of homes being bought outright or as part of a shared ownership deal, the figures suggest.
Labour’s shadow minister for young people, Gloria De Piero, said: “For many young people, all they wanted this Christmas was a home of their own.
“But soaring house prices, eye-watering rents and a lack of decently paid jobs are keeping young people off the property ladder.
“Let’s hope the prime minister makes it his new year’s resolution to help generation rent to get on in life.”
A spokesman for the Department for Communities and Local Government said anyone who aspires to own their own home should have “the opportunity to do so”.
“That is why we recently announced the biggest, boldest and most ambitious plan for housing in a generation with a doubling of the housing budget,” the spokesman added.
“Furthermore, our initiatives have helped nearly 270,000 people to buy since 2010 and our Help to Buy ISA can boost the savings of young people by 25% towards their first home.”
Stamp duty increases
Robert Gardner, chief economist at Nationwide Building Society, said rising wages and growing numbers of people in work were expected to boost the housing market.
But he added: “The main concern is that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.
“Overall, we expect UK house prices to rise by 3% to 6% over the next 12 months.”
Mr Gardner said that it is not clear if house price growth in London and the South will continue to outstrip the rest of the country, with some experts saying buyers were seeking value in other parts of the country.
First-time buyers could also find themselves competing with buy-to-let landlords at the start of the year, as investors race to beat the April deadline for stamp duty increases, experts said.
This post was written by FSB News