The report says that this will be extremely bad news for anyone hoping to get onto the property ladder in the near future.
“By 2020 the price of a first-time buyer‘s home will increase by 42 per cent to £245,165. Although wages for 22- to 29-year-olds will increase by 36 per cent by 2020, this poses a huge challenge for those wishing to be homeowners. Low-earning young people would have to spend 16 times their average wage just to buy a home,” said the NHF report.
Rents will also soar, as more people become priced out of owning a home.”Our research shows that private rents are likely to be broadly stable through 2013, but could increase sharply, by about 6 per cent a year, between 2015 and 2020 as interest rates and house prices rise. In 2020, rents are expected to be 46 per cent higher than today,” the report added.
Over the past year or so there has been significant growth in the UK’s property market, with a number of official sources recording significant price growth after years of stagnation. Much of this price growth can be attributed to government schemes introduced to boost the market by making it easier for first-time buyers to purchase homes.
However, there is now a real worry that the market could grow too quickly, as seen in the late 1990s and early 2000s, and leave the UK facing yet another property meltdown.
A chronic shortage of new affordable house building has been cited by a number of experts as being the biggest hurdle currently facing the UK’s property market. According to Roger Harding, head of policy and research at housing charity, Shelter: “We should be building 250,000 homes per year just to meet newly arising need, let alone start tackling the backlog, but in England we’re currently delivering less than half that amount each year,”
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- House prices and rent in England to surge by 2020, warns report (guardian.co.uk)
- Housing warning over homes shortage (standard.co.uk)
- How much will your first house cost? And are there enough to go round? (guardian.co.uk)
- Nearly four million under-35s will be forced to live with their parents as 40 per cent house price rise by 2020 spells misery for young buyers (dailymail.co.uk)
- Nearly four million under-35s will be forced to live with their parents as 40 per cent house price rise by 2020 spells misery for young buyers (thisismoney.co.uk)
- First-time buyers get £17,000 help from the Bank of Mum and Dad: Anxious parents eating into retirement pots to help children get on property ladder (dailymail.co.uk)
- Here we go again: boom and bust at the expense of the young set to return (taxresearch.org.uk)
- Sudden stop to Fed’s QE ‘could knock 40% off global equity prices and 20% of top-end London property’ (thisismoney.co.uk)
- Record price rises for UK homes (rentmycottage.com)
- Help to Buy – The medicine the housing market needs? (savills.co.uk)