Britain's chronic housing shortage is forcing millions of households into rented accommodation as homeowner levels sink to their lowest in nearly a quarter of a century.
Five million aspiring homeowners are being shut out of the housing market in the wake of a decade of declining home ownership, according to a new report by advocacy group the HomeOwners Alliance. It said levels of home ownership are at a 24-year low of 64.7pc, down from a peak of 69.7pc in 2002.
The rising tide of rentals, especially in London where the majority of households are tenants, paints a picture at odds with the country’s image as a nation of homeowners and ranks Britain below most of its EU peers.
“Buying your first home is no longer a joyful rite of passage for young adults, but returning to being a privilege of elites,” said Paula Higgins, chief executive of the HomeOwners Alliance.
She (SNP: ^SHEY - news) added: “This decline in homeownership is depriving a generation of the chance to own the roof over their head, shattering their dreams and aspirations. It is preventing millions of people from living the sort of lives they want to.”
Deep-rooted causes such as shortage of new homes, high mortgage deposits and the gap between people’s earnings and house prices are to blame, said the report, arguing the ten-year stagnation, while accelerated by the financial crisis, is not just a recession-related blip.
The authors warned of adverse social and economic impacts from continued decline, predicting housing benefit for old people will double by 2060 as growing numbers enter retirement without owning their home.
They also cautioned against negative effects on children of families who, forced into the rental sector, miss out on the security of home ownership.
The bleak outlook of the report, entitled 'Death of a Dream’, noted that housing output is at its lowest since the 1920s with around 100,000 homes built every year. According to the Institute for Public Policy Research, this level must reach 250,000 to avert the housing crisis.
A spokesman for the Department for Communities and Local Government said the coalition is tackling the situation through schemes which provide incentives like 5pc mortgages and interest free loans for new-builds.
He added: “This Government inherited a paralysed housing market from Labour where the lenders wouldn’t lend, the builders couldn’t build and millions of hard-working, aspiring homebuyers were blocked from taking their next step on the property ladder.”