Housing crisis will halve number of young homeowners in five years

Housing charity Shelter warns only 20% of 25- to 34-year-olds will be on the property ladder in 2020 compared with 60% recorded 10 years ago

The number of young adults able to buy homes could fall nearly 50% within five years unless the government addresses the housing shortage, a report has claimed. Over the past decade, home ownership among 25-34-year-olds has dropped by a third, from 1.8m to 1.2m, and analysis by the housing charity Shelter published on Friday suggests that if current trends continue, the number of young homeowners will drop to about 616,600 by the end of this parliament. This would mean that less than 20% in that age group would have made it on to the property ladder, compared with nearly 60% a decade ago.

In recent years, soaring house prices and problems with getting mortgages have pushed more young households into the private rented sector. In 2004, just over 675,000 people aged 25-34 were tenants. However, by 2014, the number was 1.6m. As home ownership becomes increasingly difficult, Shelter said the number of renters could rise to 2.3m by 2020. In addition, it said, a “clipped-wing generation” of young adults living with their parents had emerged.

The report followed government figures showing that the number of new homes built last year remained well below the level needed to meet demand. A total of 125,110 homes were built in England in 2014-15, up from 112,400 the previous year, but this is half the rate some experts say is needed.

Those stuck in rented accommodation have seen rents rise by 4.6% over the past year, according to figures from letting agents Your Move and Reeds Rains. The increase, the fastest recorded by the index since November 2010, pushed the average rent in England and Wales to a new high of £774 a month. In London, the average was up 7.8% year-on-year at £1,204.

 http://www.theguardian.com/business/2015/may/22/housing-crisis-halve-young-homeowners?CMP=EMCNEWEML6619I2