Young people have found it increasingly difficult to get on the housing ladder since the financial crisis, a new survey has showed, as rising house prices and rents have made it more difficult to put money aside for a deposit.
The English Housing Survey found in 2012-2013, only 18 per cent of mortgage holders were under the age of 35, down from 21 per cent in 2008-2009.
As house prices have started to rise again after the financial crisis, the proportion of young people renting has been growing.
Figures from the Office for National Statistics showed the average home in Britain cost £262,000 in May, while in the capital this was a far higher £492,000.
In 2009, 31 per cent of all households aged between 25 and 34 rented privately - but by 2013 this had increased to 45 per cent, according to the Government’s latest annual report on England’s households. And private renters spend about 30 per cent of their income to pay for accommodation, while home owners are looking at 20 per cent, feeding the vicious circle that makes it harder to get on the ladder.
David Orr, Chief Executive of the National Housing Federation, said: “It used to be the norm for people in their early thirties to set up a home of their own, but sadly being ‘priced out’ is rapidly becoming the new the norm.
“With more young people stuck renting privately, they find themselves having to pay rising rents for short-term lets, that offer them no stability or the chance to put down roots for their future.
“The Government must build more of the right homes at the right prices in the right areas, so that we can end this housing crisis in a generation.”
Meanwhile, a separate survey by YouGov and economics consultancy CEBR showed consumer confidence stalled in July for the first time since December 2012 as fewer people expected house prices to rise.
For the second month in a row the number of homeowners who expect the value of their houses to increase over the next year fell - the first two-month decline in about two years, according to the survey.
The YouGov/Cebr connsumer confidence index stood at 114.5 in July, the same as in June, ending an 18-month period of continued growth. The figure is well above last year’s levels but still below its 2007 peak. However, households' assessment of their own finances over the coming twelve months continued to improve.