The effect of rising house prices on first time buyers' ability to get onto the property ladder has been revealed by the preliminary findings of a new report from the Department for Communities and Local Government (DCLG) today.
The DCLG says in 2001, 40% of households with an average age below 30 years old were buying with a mortgage and 33% were renting privately. This has now switched with the proportion of households with an average age below 30 years of age buying with a mortgage declining to 34% and the proportion opting to rent rising to 41%.
While the figures are only the preliminary findings of the DCLG’s annual Survey of English Housing it says most of the information released today can be expected to be very similar to the final results of the survey.
The survey also reveals the number of second homes in England has doubled over the last nine years. It says the number of English households with homes abroad has risen from 115,000 in 1997 to 235,000 this year. English households also own about 260,000 second homes within England - but this has risen by a more modest 30% over the past nine years.
Despite the affordability constraints faced by first time buyers 60% of private renters in England still say they expect to eventually buy their own home with 10% of this figure saying they would probably buy the place they were currently renting.
And the survey also suggests first time buyers are receiving help from family members to get onto the property ladder. It says 650,000 homeowners withdrew an average of £33,000 each in equity from their homes during each of the past three years. And 14,000 of these homeowners withdrew equity to help fund another property purchase - either for themselves or for a family member. The average withdrawal used for this purpose was £74,000, says the survey.
The most common use for the money withdrawn was for home improvement, accounting for 56% of withdrawals. A further 29% of withdrawals were used to pay off other debts and 15% to buy new goods for the home.
Other findings show an estimated 14.6m owner occupiers in England representing 70% of total households in the region, the remainder being made up of 3.7m (18%) social renters and 2.5m (12%) private renters.
Meanwhile nearly 2m households are revealed to have been resident at their current address for less than a year, although this varies considerably by type of tenure. The survey says 38% of private renters have been in their current accommodation for less than a year compared to just 2% of outright owners.
And 46% of all households have lived at the same address for 10 years or more, while 27% have been at the same address for 20 years or more.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
Three years at Wells Fargo
Effective from 9 December 2019
One firm with permission suspensions left
Continuing the Architas education series for clients.
Needs to apply for authorisation