Number of young homeowners dips dramatically, says new survey

A new survey conducted by Savills on behalf of the Local Government Association (LGA) has found the proportion of people aged 25 who own their own home has plummeted in the last 20 years.

The new analysis has concluded that where nearly half (46%) of people of 25 were homeowners in 1996, today the number has sunk to just 20% today. Across England and Wales, the number of homeowners of all ages has dropped by 4.4% over the last 20 years and the number of private renters increased by 5.1% over the same period.

 Further analysis has concluded that people who own a property pay a great deal less of their income on their mortgage than renters on their tenancy, and that the number of new social rent homes built has also dropped dramatically.

Whereas in 1995/96, nearly 60,000 homes for social rent were constructed, in 2015/16 the number was 88% lower, at 6,550. Where private renters pay, on average, 34% of their household income on rent, and social renters 29%, homeowners pay just 18% of theirs.

The figures also showed average prices of homes at 7.9 times annual earnings and deposits at 62% of annual income nationally, up to 131% in London.

Cllr Martin Tett, LGA housing spokesman, says: “Our figures show just how wide the generational homeownership 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.

“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.

“But our focus is beyond just bricks and mortar. The Housing Commission sets out how council housebuilding can help deliver homes but also help families boost their household incomes, create prosperous and successful places, and improve the health and quality of life for our ageing population.”

Overall, the LGA report has a number of conclusions on the state of the country’s property market and recommendations on how to improve housing nationally, including:

• The number of affordable homes built in 2015/16 was the lowest for 24 years
• Persmission has been granted on up to 475,000 unbuilt homes
• Discounted new builds under the Starter Home Initiative will be out of financial reach of needy buyers in 67% of council areas.
• Taxpayers have subsidised planning applications by £450m in the last three years.
• Just 6% of the properties built in 2014/15 (7,000 of 155,000) were built specifically for older people.

You can download the full report from the LGA here.