The widening gap between house prices and wages means that first time buyers living in the North West of England are having to pay over £42,000 more for a home, new research from Shelter reveals today.
The charity’s analysis shows that if the average income of a first time buyer and average house prices had remained in line in the region, those lucky enough to get a foot on the property ladder would be paying £42,000 – or a third – less for their first home.
With average house prices in the North West now seven times the average wage, compared to just four times fifteen years ago, Shelter is warning that aspiring homeowners on ordinary incomes without access to the Bank of Mum and Dad have little hope of covering the extra cost.
This is having a dramatic impact on young people’s chances of owning a home across the country. In 1991, two-thirds of people aged 25-34 had a home of their own, compared with just over one-third of people in that age group today. Instead, millions of young adults are stuck in their childhood bedrooms or in the rent trap paying dead money to landlords.
Recent government statistics showed that homeownership overall has dropped to its lowest level since the mid 1980s.
Sarah and her husband live with their young daughter, and worry they might never be able to afford a home of their own.
“We really want to buy a place of our own to build our lives in, especially as our daughter grows up. We’ve been working hard for years and saving everything we can, but by the time we pay the rent and bills every month we barely have anything left over, no matter how thrifty we are.
“Moving from place to place every couple of years is not how we want to raise our child. It’s so disheartening to think we might never be able to give her a stable home to grow up in.”
Shelter is warning that unless politicians get serious about building the affordable homes we need, an entire generation will be priced out of a home of their own.
Shelter’s Chief Executive, Campbell Robb, said: “When wages and house prices are so out of sync that first time buyers are having to pay tens of thousands of pounds more for a foot on the ladder, it‘s a clear sign that our housing market is out of control.
“Without access to a lump sum from the Bank of Mum and Dad, millions of young people and families are facing a lifetime in expensive private renting, or stuck in their childhood bedrooms well into adulthood.
