A housebuilder has admitted it is hardly building for first-time buyers now, and that first-time buyers are now reliant on the private rented sector.
Mark Clare, chief executive of Barratt Developments, said the company is moving away from building homes for first-time buyers because young people are finding it too difficult to get mortgages.
He said that less than 30% of Barratt’s new homes outside London are now designed for first-time buyers, compared with 72% two years ago.
He said: “First-timers are being pushed into the private rental market, but that also requires new homes to be built.”
He said there is a “severe” lack of new homes, with only about 100,000 now being built each year. Of these, around a quarter are family units as housebuilders concentrate on larger properties. “The gap is getting bigger and bigger,” he added.
Barratt is looking at entering the rental market and is thought to be considering a business model whereby it sells a bulk of units on its schemes to landlord investors, whilst keeping a stake.
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