Danger of housing shortfall

Only three in 10 of today’s 10 year olds will be able to afford their own homes unless house building increases, says the Office of the Deputy Prime Minister.

By 2026 the proportion of 30-something couples able to afford to buy is set to fall to about one-third compared with a half today and two-thirds in the late 1980s, if the country carries on at the current building rate.

ODPM figures show that unless more new homes are built, tomorrow’s 30 year olds will be denied the opportunity their parents and grandparents had to own a home of their own. Currently 71% of households are home owners but 90% say they would like to own their homes.

The projections are based on analysis undertaken as part of the government’s response to the Barker Review, which will be set out in full before the end of the year. The analysis shows building more homes can reduce pressure on prices and help more families afford their own homes.

The government also says affordability is becoming a threat to social mobility. Figures show 23% of first-time buyers now rely on gifts and family loans for deposits compared with 4% 25 years ago.

The Barker Review showed Britain has not been building enough homes to meet rising demand for several decades and the result has been spiralling house prices and growing problems of affordability.

Over the past 30 years the number of households has increased by 30% but the level of building has fallen by over 50%. In the South and East, for every seven new households only four homes are being built.

Yvette Cooper, housing and planning minister, says: “For the sake of today’s 10 year olds we need to start planning new homes for the future now. It isn’t fair if people’s chances of owning a home in the future depend on whether their parents or grandparents were home owners before them.”