Millions of young Britons may never be able to afford to buy a house.
The deposits needed to get on the first rung of the housing ladder are rising beyond the grasps of millions. Does this matter?
Getting onto the housing ladder has long been seen as a financial priority. The costs of deposits, and restrictions on the kinds of finance options that are available a making it harder than ever to achieve.
According to figures from the Joseph Rowntree Foundation there will be a massive drop in the number of home owners under 30 by 2020 – his could be almost by half.
In addition to this, the charity warns that up to four hundred thousand people could find themselves priced out of both rentals and mortgages.
Does it matter?
There are a number of problems that can be seen as emerging as from the exclusion of a large segment of the population from the housing market. Of these one of the most significant is that in the Britain that is a ‘property owning society’ not owning property is a major handicap.
While pensions and savings products have often proved to be let-downs, it is property that has come to the financial rescue of many. Renting is, as the saying goes “dead money”, those that are paying rent are not laying that money down for their future prosperity.
In addition with the cost of renting in the private sector often taking a greater proportion of income than the cost of a mortgage there is the further prospect of problems being stored up due to a lack of savings.
Everybody is vulnerable
Even those that are fortunate enough to own property are not immune from the problems caused by high barriers to home ownership. In order for the property market to be healthy their needs to be a steady stream of first-time buyers entering the system.
At present this is already thought to be too low, and if it falls further there could be negative consequences for both the housing market, and then inevitably the wider economy.
There are, of course, plenty of countries where long term rental is the norm. It may be that Britain is to become like this – but if there are not going to be problems there may have to be some changes. For one thing, at present private tenants lack security and exploitation by landlords and letting agents is widespread.
Striking a fairer balance between the interests of owners and tenants is important in order to provide the social stability necessary for economic health. Unless property ownership ceases to be the only route by which financial security can be obtained there will be a major drag on the economic health of the nation.
Does it matter if you don’t own your own home? Why not tell us your opinions in the comment section.