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News: The decline of homeownership among Britain's youth

Thu, 29 Jan 15

Homeownership is on the decline in Britain. While multiple reports have already demonstrated this decrease, new figures from the Official for National Statistics just how severe the fall has been.

The analysis of the market since 1980 shows that in the 1980s and even the 1990s, a third of those between the ages of 16 and 24 could afford to purchase a home. That share has decreased to just 10 per cent today.

Indeed, in 1991, 67 per cent of the 25 to 34 age group were homeowners. By 2011/12, this had declined to 43 per cent. A similar trend has occured in the 35 to 44 age bracket. Only older age groups have seen their level of homeownership increase, with almost 80 per cent of 65 to 74 year olds and just over 70 per cent of those aged over 75 owning property, compared to approximately 60 per cent and 50 per cent respectively.

This rise in age among homeowners is a consequence of the falling number of first time buyers in the UK, which has, in turn, been driven by the rising costs of buying a home.

For first time buyers, the average deposit as a percentage of purchase price increased by almost 10 percentage points between 1988 and 2013, standing at 22 per cent of the price of the house. Deposits for first time buyers peaked during the economic downturn in 2009 at 28 per cent of the purchase price. Since 2009, deposits for first time buyers have steadily fallen – though figures remain among the highest for the last 25 years.

The ONS also highlights the "limited supply growth" in the face of growing demand. Indeed, the lack of house building in recent years has become a major political issue in the run-up to the 2015 general election, as parties promise to improve stock and help correct the imbalance that currently plagues the property market.

The number of households in England is projected to reach 24.3 million in 2021 - the equivalent of an additional 221,000 households per year.

"Housing is therefore likely to remain an important topic in the future," concludes the ONS.

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