A new report from the independent Social Market Foundation think tank has found that almost two million more people have been locked out of the housing market since 2001 – meaning they are effectively obliged to privately rent if they leave their parents’ homes.
It says that if home ownership rates among 25 to 34 year olds in 2016 were the same as in 2001, an additional 1.8m people in this age bracket would now be owner-occupiers. However, they are described as ‘locked out’ due to high house prices, stricter lending criteria and the difficulty of saving for a deposit in a low-interest environment.
The report points to insufficient housing supply as the key underlying factor, showing that the UK will face a shortfall of almost 1.3m homes by 2026, based on current unmet demand and inadequate supply growth, which will further drive up property prices.
The report also considers how the housing market may evolve over the decade ahead, warning that supply may continue to fall short while demand continues to rise, causing homes to become ever more unaffordable.
A similar report last week showed how 18 to 21 year olds were being increasingly denied access to home ownership.
The report claims crowdfunding could be used to improve the savings potential of young would-be purchasers and by boosting the supply of new homes through the provision of crowdfunded equity to small and medium-sized housebuilders.
“Getting onto the housing ladder is becoming harder and harder for young people. Our failure to build enough homes means this problem threatens to stretch into the future. Property crowdfunding could be the means to tackle both demand and supply” claims the author of the report, SMF economist Katie Evans.
