25% of youngsters unable to buy a home

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by Kay Murchie

According to research from Hometrack, the property research specialists, 25% of young working households cannot afford to purchase a home. Hometrack studied every local authority area across the UK and compared house prices with earnings.

The research focused on the intermediate housing market, which are young working households that are not entitled to housing benefit but are unable afford the inexpensive properties in their area.

Across the UK, a quarter of these households could not afford to buy with the South West having 34% of young households priced out of the market. London followed at 31.5% and the South East at 30.2%. The research established that Scotland is the most affordable area with only 15.8% of young working households priced out of the market.

Renting is now the only option available to some young people with the price of renting increasing more steadily in accordance with earnings and becoming much cheaper in comparison to buying.

Professor Steve Wilcox of the University of York carried out the research and commented that house prices have trebled in the last decade but private sector rents only increased in line with earnings. Consequently, the costs of renting have declined compared to the costs of buying.

A spokesperson for Hometrack said the research highlighted the affordability problems and this is due to an unbalanced and inflexible supply of homes which has resulted in high entry costs for housing.

Hometrack concluded that the private rented sector is taking much of the strain and while the rental market has grown over recent times, this growth needs to be sustained to guarantee sufficient housing choice for those priced out of the market.