Homebuying a lost hope for under-40s
More renters than owners within decade, says study
THE number of Scots living in rented property will outnumber homeowners in under a decade, a shocking new report reveals.
Experts have warned the dream of homeownership has been dashed for working couples and young families trapped in ‘Generation Rent’.
The study predicts that the average house price will soar by almost a third to £259,000 in Scotland by 2020.
This leap in value, combined with strict mortgage conditions and demands for huge deposits by chastened banks will trap under 40s into long-term renting with no real hope of ever owning their own homes.
Instead, much of the country’s housing stock is being snapped up by middle-aged would-be landlords with bank balances that allow them to finance a buy-to-let revolution.
In the report, Pricewaterhouse-Coopers (PwC) predicts house prices will rise faster in Scotland than most of the UK, with only Northern Ireland, the East Midlands and South-East England expected to be more rapid.
And by 2025, it expects more people to live in rented accommodation than own their own home.
Paul Brewer, government and public sector partner at PwC in Scotland, said: ‘With housebuyers facing a triple whammy of affordability, stringent credit conditions and a sharp rise in lender deposit requirements, it’s perhaps not surprising that Generation Rent is here for the medium term at least.
‘First-time buyers are particularly hard hit, with many now having to turn to private landlords as demand outstrips supply in the housing market.
‘Affordable, quality housing is a necessity if we are to achieve our economic ambitions for Scotland. With the right-to-buy scheme set to end on July 31, 2016, it will be interesting to see how the Scottish Government’s st r ategy and acti on pl an addresses these i ssues and, crucially, plugs the gaps at this end of the housing market.
‘Collaboration among developers, social housing providers and government, alongside radical and innovative investment measures, will be key to solving Scotland – and the UK’s – housing market challenge.’
In the 1980s, the right-to-buy r evolution under Margaret Thatcher allowed hard-working Scots to buy their council houses, a phenomenon which contributed to the first classless homeowner generation.
But First Minister Nicola Sturgeon is axing the popular right-to-buy policy, which means families will no longer be able to own their council home – as her own parents did.
Governments north and south of the Border are also failing to build enough homes to keep up with demand, exacerbating the problem.
Separate figures from property analysts Hometrack predict house prices across the UK’s 20 biggest cities could be surging at a rate of 10 per cent by the end of 2015.
Property values across the 20 major cities increased by 8.4 per cent year- on-year in June to reach £226,200 on average while in Scotland Glasgow saw a 5.5 per cent rise, Hometrack said.
Meanwhile, PwC predicts Scottish economic growth will be slightly slower than the UK as a whole this year, at 2.4 per cent compared with 2.6 per cent.
Even so, Scotland’s slightly lower forecast will still be higher than most, if not all, European countries.
Comment – Page 14
‘Triple whammy for purchasers’