Homes ‘Crisis’ Will See Soaring Rents and House PricesMake Text Bigger
Home ownership is set to tumble back to levels last seen 30 years ago as house prices and rents are set to surge upwards, according to a new study.
Buy to let is expected to rise to almost one in four homes over the next decade.
The drivers of change are strict mortgage lending criteria, the large deposits needed by buyers and high property prices coupled with a shortage of new-build homes. The findings come in the form of a report commissioned by the National Housing Federation (NHF), the trade body for housing associations in England.
To support the predictions, the NHF has released some statistics that show:
- People owning a home will drop from a peak of 72.5% in 2001 to 63.8% in 2021.
- In London, the majority of people living in the capital will rent by 2021, with homeowners falling from 51.6% in 2010 to 44% by 2021.
- The North East will be the only place to see an increase in homeownership over the next decade, rising marginally from 66.2% to 67.4%.
- Average house prices in England will soar by 21.3% over the next five years from £214,647 in 2011, to £260,304 in 2016.
- Average rents are forecast to increase 19.8% over the next five years, from £486 a month in 2011 to £582 a month in 2016
NHF chief executive David Orr said: “With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it’s time to face up to the fact that we have a totally dysfunctional housing market.
“Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy. For the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels.
“At the heart of this crisis is a chronic shortage of new homes. Despite the overwhelming need to increase supply, house building has slumped to a 90-year low, plunging the country even deeper into the mire.
“Ministers need to make unused public land available to housing associations, local authorities must assess the level of housing need in their area, and housing has to be finally treated as a top political priority.”
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