Over a third of households 'can't get on property ladder'
Oct 25, 2006
Rising house prices means that more than a third of working households aged below 40 in the UK cannot afford to get onto the property ladder
A report from social research charity the Joseph Rowntree Foundation found that house prices have been rising faster than earnings, with the ratio of mortgage costs to earnings for first-time buyers now at the 36 per cent peak last seen in 1990. This could also be a contributing factor to the higher levels of debt being recorded at the moment. For those that do have a property, with more income being spent on mortgage repayments, that is leaving less for general living expenses and many people are taking out loans to fund other purchases. The number of households in the UK has grown by 35 per cent since 1971, despite the population growing by only eight per cent, due in part to an increase in the number of adults living alone.
While the total number of homes has overall kept up with this growth in households so far, the rate of household growth in England is expected to accelerate to 220,000 new households a year from 2006-21, meaning an increase in house building is needed, the report said. Meanwhile, the number of new affordable homes being built for those who need subsidised housing is not keeping up with demand, with house building levels only half those achieved in the mid-90s. The co-author of the report advised the most pressing policy challenges concerned increasing affordability for first-time buyers and ensuring housing is available for those on low incomes.
A spokesperson suggested that the government needs to refine the methods for judging regional and local imbalances between household growth and housing stock.
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