Young people half as likely to own a home

A new report by the Local Government Association has found that young people today are half as likely to own a home as they were 20 years ago.

The analysis, published in the Understanding Local Housing Markets report, reveals that only 11 per cent of people born in 1996 own their home today, compared with 21 per cent of those born in 1976 who owned their own home by the time they were 22. This means that many young people face renting into retirement, as the high cost of the private rental sector is preventing households from being able to save for a deposit.

Across the country, average households in England are now spending 33 per cent of their income on private rent, compared with home owners spending 17 per cent of their income on mortgage repayments. In many London boroughs average rents are over 50 per cent of household earnings.

Furthermore, the average deposit in England is 72 per cent of an individual’s gross salary, rising to 137 per cent in London and dropping to 56.7 per cent in the North West. The number of homes bought and sold last year is a third lower than before 2008 as more people stay put and so reducing the opportunity for people to move up the ladder.

Council leaders are calling for the powers and funding to fix Britain’s ‘broken’ housing ladder by building new social rented homes to help give all people access to high quality affordable homes, and give more families the opportunity to save for a deposit needed to buy a new home. The LGA is calling on the Government to use the Spending Review to devolve the Right to Buy scheme so that councils can set discounts locally and retain 100 per cent of their receipts to invest in more homes locally, and to invest in supporting all councils to build more homes.

Martin Tett, the LGA’s Housing spokesman, said: “Home ownership remains a distant dream for most young people, with the high cost of the private rental sector meaning many are unable to save for a deposit to get on to the property ladder and face the prospect of being stuck renting into retirement.

“However what is now becoming apparent is once on the ladder, those other rungs are becoming increasingly out of reach. Typically a home owner may want to move from first-time buyer, through to a family home, followed by downsizing for empty-nesters. But for too many households, our national housing ladder is broken, as they face being unable to move as their circumstances change.

“Homes for affordable and social rent are desperately needed across the country. Councils must be able to ensure a mix of homes – to rent and buy - which are affordable for those people that need them and that are crucial for enabling people to save money towards a deposit.

“By scrapping the housing borrowing cap, the government showed it had heard our argument that councils must be part of the solution to our chronic housing shortage. The government needs to use the Spending Review to build on this by introducing further measures to spark a genuine renaissance in council housebuilding in all areas.”