Young Londoners' housing struggle laid bare amid home ownership slump

Sharp fall: spiralling property prices, low wages and restricted mortgage lending has meant there are 85,000 fewer home owners aged under 45-years-old compared to 2010
Matthew Lloyd/Getty
Kate Proctor16 November 2016

The struggle of young Londoners to get on the housing ladder was laid bare today as a dramatic slump in home ownership is revealed.

A combination of spiralling property prices, low wages and restricted mortgage lending has meant there are 85,000 fewer home owners aged under 45-years-old compared to 2010.

The decline in home ownership over the past six years is coupled with a sharp increase in renting, with 111,144 more people in the same age group now renting privately.

The statistics were released today as part of the independent Redfern Review - the biggest home ownership analysis to take place in a decade.

It found the financial squeeze on young people has been at the heart of the decline.

Slump in home owners: Young Londoners are struggling to get on the housing market, a report says
Daniel Leal-Olivas/PA Wire

Labour’s shadow housing minister John Healey MP, who commissioned the report, said: “Buying a home used to be a natural part of growing up. But for younger people in London it is fast becoming a luxury for those on the highest salaries, or whose parents have the deepest pockets.”

“The shrinking opportunity for young people on ordinary incomes to own a home is at the centre of the growing gulf between housing haves and housing have-nots.”

The review found that there has been a 6.2 percent fall in home ownership between 2002 and 2014 due to tougher first time buyer credit constraints, rising house prices and the fall in income for those under 40-years-old.

While there used to be parity in the wages paid to those aged 28 to 40 and the over-40s, the younger age group’s average income fell by 10 per cent in the wake of the financial crisis, reducing the purchasing power of first time buyers.

More renters: decline in home ownership over the past six years is coupled with a sharp increase in renting 
Carl Court/Getty Images

New analysis of English Housing Survey statistics released alongside the review today also showed that between 2010 and 2015, the number of home-owning households aged under-45 dropped in London by 84,037.

The decline is particularly acute for the under 30s, with 50,000 fewer people in that age category purchasing a home compared to 2010 - a fall of 10.8 per cent in five years.

Pete Redfern, chief executive of housebuilder Taylor Wimpey who led the review, said its findings reveal the “challenges that young people face in buying their first home.”

The report urges Government to devise a long-term strategy for housing, and immediately create an independent Housing Commission, which could make recommendations on long-term solutions.

While the report welcomes the building of more homes and the Government’s Help to Buy and Starter Homes schemes, it concluded more needs to be done to challenge relative wage rates and mortgage lending.

They also suggest providing specific subsidies for certain “qualifying” groups to help them get on the housing ladder.

A spokeswoman for the Department for Communities and Local Government said: “Since 2010, we have been turning round the broken housing market inherited from the last Labour Government. Latest figures show that 190,000 extra homes were delivered in the last year, the highest annual total since Labour’s housing crash.

"But we know there is more to do to ensure the housing market works for everyone and not just the privileged few.”

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