Proportion of 25-year-old homeowners halved in 20 years

Analysis from the Local Government Association (LGA) has shown that home ownership rates among 25-year-olds have plummeted by more than half in 20 years.

The figures showed that only 20 per cent of 25-year-olds are on the housing ladder today, compared with 46 per cent of all 25-year-olds owning their own home 20 years ago.

The analysis, carried out by estate agents Saville, showed that only 6,550 social rented homes were built in 2015/16, a drop of 88 per cent from 20 years ago when 56,950 were built in 1995/96.

On top of this, the figures showed that private renters now pay on average 34 per cent of their total household income on rent and social and affordable renters pay 29 per cent. This rises to 51.5 per cent of incomes for private renters when deducting state financial support, and 41.7 per cent for social renters.

In comparison, homeowners pay an average of 18 per cent of their total household income on their mortgage, and those that own outright have no housing costs.

Average house prices are now at 7.9 times average earnings, with 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. This has meant that the proportion of total homeowners of all ages across the country has fallen by 4.4 per cent since 2008 while private renters has increased by 5.1 per cent.

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.

Cllr Martin Tett, LGA housing spokesman, said: "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.

"There is no silver bullet and everyone must come together to meet the diverse housing needs in our villages, towns and cities. The Government's Housing White Paper is an opportunity to boost housing supply and affordability. It must recognise that a renaissance in housebuilding 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.

"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.”