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28% of young buyers priced out of homes market
Mira Bar-Hillel, Property Correspondent04.06.08
More than one in four young people are priced out of their local housing market with matters made worse by the credit crunch, research showed today.
About 28.3 per cent of young working households cannot afford the cheapest property in their local area, according to a report by Professor Steve Wilcox of the University of York.
The problem is more severe in London where 41 per cent are priced out of the market, with the average first home costing 6.11 times young people's income.
In the South-West the figure is 40 per cent. Unaffordability rises to more than 50 per cent in some towns. The report, compiled for property information group Hometrack, said the situation was being made worse by rising mortgage costs, both before and after the credit crunch hit.
It found that average mortgage costs for first-time buyers rose by 12 per cent last year, with people getting on to the property ladder having to spend an average of
34.5 per cent of their pay on mortgage repayments, up from a previous high of 34.1 per cent in
1990. Professor Wilcox said: "While house prices are falling, access to the property market is being increasingly limited by the costs and more restrictive terms of a substantially reduced supply of mortgage finance.
"Without further measures to restore the availability and accessibility of mortgage finance there is the risk of a severe downturn."
Reader views (1)
Current situation works for me as I rent several properties out to these individuals. As they cannot buy they must rent. Consequently they have enabled me to enjoy holidays several times a year, live in N1, stop working at 38 and have an extensive portfolio. I hope this goes on for a while.
- James, London N 1
