Younger people are finding it difficult to get on the first rung of the housing market ladder due to a shortage of homes.
A report by the Office for National Statistics (ONS) published yesterday shows how the total number of houses built per year has fallen from around 250,000 in 1980 to between 150,000 to 200,000 in the 1990s, and less than 150,000 today.
The fall in house building is due to decrease in both public and private house construction.
“There has been growing demand and relatively limited supply growth. House prices have been increasing, and first time buyers are finding it more difficult to get on the property ladder – while home ownership among younger age groups generally has declined,” the ONS said.
The result of weak supply growth has been a nine-fold increase in house prices since 1980, according to the ONS’s house price index.
The number of first-time buyers now stands at around 250,000. The average number of mortgage loans for first time buyers between 1980 and 2002 was 486,000 per year.
“The reduction in the numbers of first time buyers has subsequently had an impact on the age of homeowners. In 1991, 67 per cent of the 25 to 34 age group were homeowners. By 2011-12 (April to April), this had declined to 43 per cent,” the ONS said.
The average deposit paid by first- time buyers has rocketed too. The average deposit needed by a first time buyer as a percentage of the purchase price climbed from around 12 to 22 per cent. For others, it has remained at around 35 per cent since 1988.