A government-backed housing body has warned that the next generation of homebuyers face average house prices that can be as much as ten times their salary. This warning comes as the number of homes being built decreases and the dream of becoming a homeowner becomes near to impossible for millions of young people.
The government-backed housing body, the new National Housing and Planning Advice Unit, found that more than a third of non-homeowners think that they will never be able to buy and a fifth believe that it will take them at least five years before they are able to afford a home.
"People think it's tough getting on the housing ladder now," says Abbi Rouse of online loan brokers, Interfinancial Limited. "But it will only get worse if house prices increase at the rate given by the NHPAU.
"We've got a society that thinks a 125% mortgage - basically a 100% home loan topped up with a 25% personal loan - is normal. What will this be in ten years? A 150% mortgage? It's frightening for first time buyers."
Many first-time home buyers are seeing a rise in the deposit needed to purchase a new home and the demand for housing is growing and the pressure on the market is only getting worse.
A survey done by NHPAU found that three quarters of people thought that the house prices within their local area was a problem and eight out of ten adults stated that the government should take some form of action to make the housing market more affordable for first-time buyers.
"The problem is though that people already on the housing ladder don't want to see house prices drop," says Rouse.
"UK homeowners have often struggled to afford their home, taken out home improvement loans to do them up and are hoping to afford something bigger in the future.
"If the government floods the housing market with cheap homes for first time buyers, it is bound to affect the current housing market - possibly pushing homeowners into negative equity."
The National Housing and Planning Advice Unit were established by the government to provide independent advice on ways to improve the housing market affordability. According to their figures in 2000 the average house was costing four times the annual salary, and in 2006 the average house price was seven times the annual salary.
Over four years the house price average has risen dramatically; great news for home owners looking to build wealth, but a catastrophe for those who fear that they will never achieve the goal of owning their own home.
![[Valid RSS feed]](http://www.talkinmince.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
