More young people look set to live with their parents as buying a home becomes increasingly expensive, the government’s housing accelerator Homes England has warned.
Office of National Statistics has revealed the cost of a home is rising quicker than earnings with affordability ratios increasing from 4.92 in 2002 to 8.28 in 2022.
“Many young people cannot afford to buy homes in their local communities where they have grown-up, due to worsening affordability,” Homes England said in its latest factsheet The Need for Homes.
Alongside this Homes England has quoted Census statistics which forecast the UK population soaring to more than 60m by 2045.
Home Builders Federation, HBF, executive director Steve Turner said: “Amidst an already acute housing shortage in this country house building is falling sharply. Whilst the government may say it wants to be building 300k homes a year, the policy environment is resulting in us getting further away from that target.”
The National House Building Council’s latest quarterly statistics published last November showed a year-on-year drop of 53 per cent in new registrations with completions down by 15 per cent.
Last financial year just 234,000 new homes were built, down by six per cent on figures for 2019-20 and below the government’s 300,000 new homes a year target.
More infrastructure help and better-resourced planning authorities needed
The housebuilding industry has criticised the government over an anti-development planning system, lack of support for house buyers and under-resourced council planning departments.
“The social and economic implications are stark, and unless the constraints are addressed urgently decent housing will become even more inaccessible, and thousands of jobs will be lost,” said Mr Turner.
The National Federation of Builders, NFB, head of policy and market insight Rico Wojtulewicz said: “Planning for housing is just one part of the puzzle because we also need the infrastructure to support good placemaking, and this means greater land use. Unfortunately, the government has played planning politics for far too long and this has cost the British public affordable and enough housing, better jobs, regional connectivity and levelled up places.”
Homes England has quoted Office of National Statistics data revealing the cost of a home is increasingly more quickly than earnings. In 2002 the average house price in England was £102,000 and the average salary was £20,739. However, in 2022 this climbed to £275,000 with the average salary rising to £33,208. London was the least affordable place to live with the average house price more than trebling to £525,000 in 2022 compared with an average house price of £174,000 back in 2002.
Conveyancing solicitors Bird & Co said the number of enquiries it received from first-time buyers had slumped from 68 per cent in 2023 compared with 72 per cent in 2020.
Partner Daniel Chard said: “Constructing new homes loses its purpose if they remain unaffordable, particularly for aspiring first-time buyers striving to step onto the property ladder.”
Brokers Hank Zarihs Associates said development finance lenders were worried that the current tough sales environment might dissuade housebuilders from developing sites.