Britain is heading for a housing crisis over the next decade, with fewer able to afford to buy homes and house prices and rents rocketing, an alarming new report from the National Housing Federation (NHF) has warned.
The combination of stricter lending rules, increasingly high minimum deposits and rising house prices has sent home ownership spiralling downwards and will continue over the next 10 years. The NHF predicts that home ownership will fall from its 73% peak in 2001 to 64% by 2021.
Bleak future for home owners
According to the Oxford Economics report commissioned by the NHF, the UK is rapidly heading towards becoming a nation of renters. In London, it predicts that the majority of people will rent property, with home ownership in the capital falling to 44% by 2021.
Meanwhile, the average house price looks set to rise by 21.3% over the next five years. This means that first time buyers will, on average, need to find deposits of around £26,000 to buy a property, compared to the £21,000 they currently require.
The news compounds the misery for home owners. Two weeks ago, the Council of Mortgage Lenders revealed that 800,000 home owners were facing negative equity in their properties.
Lack of new housing
The NHF believes that a ‘chronic undersupply of new homes’ underpins the impending housing crisis. It stated that in 2010/11, just 105,000 new homes were built in England – the lowest since the 1920s.
To try an tackle this, the Coalition Government has pledged to invest £4.5bn into building affordable housing and aims to deliver 170,000 new homes over the next four years.
However, the NHF states that this figure is 63% than the previous plan to build new homes.
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