Only three out of ten of today's ten year olds will be able to afford to buy their own homes unless house building increases, according to figures released by the ODPM.
If the UK carries on with current building rates, by 2026 the proportion of thirty something couples able to afford home ownership is set to fall to approximately a third, compared to half of couples today and two-thirds of couples in the late 80s. The figures show that unless more new homes are built to meet the needs of the next generation, tomorrow's thirty year olds will be denied the opportunities their parents and grandparents had to own a home of their own. Currently 71% of households are homeowners, but 90% say they would like to own their own home at some point.
These preliminary projections are based on analysis conducted by the Government in response to the Barker Review, which will be set out in full before the end of the year. The findings show that building more homes reduces pressure on house prices, helping more families into home ownership.
According to the Survey of English Housing 2004/05, which has also just been published, households under 30 have already seen a significant drop in homeownership. According to this survey the percentage of households under 30 with mortgages has dropped from 40% to 36% between 2000 and 2004. Ten years ago the relative percentage was as high as 46%.
Government analysis also shows that problems with affordability are becoming a threat to social mobility. ODPM figures show that 23% of first-time buyers are now relying on gifts and family loans in order to afford a deposit, compared to just 4% twenty-five years ago.
The Barker Review revealed that Britain has not been building enough homes to meet rising demand for several decades, and the result has been rising house prices and growing problems of affordability. Over the last thirty years the number of households has increased by over 30%, but the level of building of new homes has fallen by over 50%. In the South and East, for every seven new households, only four new homes are being built.
The Barker Review called for a change in house building to meet rising demand, and set out a series of recommendations for reform. The Government has already set out proposals for an increase in house building over the next ten years, as part of the Sustainable Communities Plan, including an extra 200,000 units not within current regional plans; these are to be built in the Thames Gateway and three other growth areas.
Figures released by the Housing Corporation indicate that the Key Worker Living Programme (KWL) is running well ahead of target. Between 6,500 and 7,000 key workers are projected as being helped by the end of 2005/06, against a target of 5,722.
The Housing Corporation, which administers the KWL Programme, was given a wider remit by the Government, including:
As of 31 October 2005, a total of 7,912 key workers had received assistance from the KWL Programme. This brought the total number of those assisted through key worker housing initiatives to 18,244.