Middle-class millennials priced out of housing

Young professionals are half as likely to be home owners as they were 20 years ago

YOUNG middle-class professionals are half as likely to get on the housing ladder as they were 20 years ago, a new study has found as Tory MPS warned that the issue was an “iceberg” that could sink the party.

A report by the Institute for Fiscal Studies said that just one in four young middle-income families now owns their own home, down from two in three in the Nineties.

It means qualified workers, including teachers, nurses and office staff, who could once comfortably buy their own homes, are now stuck renting into their 30s.

The report comes amid mounting concern in the Conservative Party that the Government is failing to build enough homes and that Jeremy Corbyn, the Labour leader, is getting through to “Generation Rent”.

The Tories have traditionally been seen as the party of home ownership and Tory MPS believe that the failure to get young people on the property ladder will cost the party dearly at the next election.

Last night Tory MPS urged Theresa May to take more radical action. Nick Boles, a Tory MP and former planning minister, said: “The double whammy of stagnant wages and spiralling house prices has had a devastating effect on the ability of people in their 20s and 30s to buy their own home.

“This is an iceberg warning for Theresa May and the Conservative Party: if we do not take bold steps to get more houses built it will sink us at the next election.”

The IFS, a think tank, said growing numbers of young people were being forced to rent because, over the past two decades, house prices had risen around seven times faster in real terms than the incomes of young adults.

The IFS findings come despite a series of government schemes intended to get more people on the housing ladder, including Help to Buy, which was specifically designed to boost homeownership among “Generation Rent”.

A Downing Street source said that housebuilding was the Prime Minister’s domestic priority and highlighted recent figures showing that the number of first-time buyers had reached an 11-year high.

However, Mark Hayward, the managing director at the National Association of Estate Agents, described Help to Buy as a “failure” and blamed previous governments for failing to build more houses.

He said: “We’ve had Help to Buy but it should really be named ‘Help to Sell’ as it has assisted builders rather than first-time buyers.

“The lack of housing supply has also seen young people paying higher levels of rent, which prevents them saving for a deposit. Those who can’t afford family homes are choosing to rent larger houses rather than buy some- where really pokey, and our research shows young people are now spending an average total of £50,000 on rent before they can buy.”

Over the past 20 years, average house prices have risen by 152 per cent from £79,000 to £198,000, after adjusting for inflation, the study found.

By contrast the real net family

incomes of those aged 25–34 grew by only 22 per cent over the same period.

Twenty years ago families with net incomes of £17,900 to £24,600 were classed as having “middle” incomes, with the figure rising to between £22,200 and £30,600 over the period.

As a result, the ratio of average house prices to family income has doubled from 4 to 8 over 20 years.

A separate report has found that house prices in English shire counties are rising at three times the rate of London, prompting calls for more powers to encourage house building.

The latest Housing Price Index reveals that county house prices rose 5.9 per cent in 2017, compared to just 2 per cent in London and 4.9 per cent in cities. ♦the life expectancy gap between the richest and poorest communities in the UK is growing, according to a report.

A 60-year-old man living in the most-advantaged fifth of neighbourhoods can expect to live five years longer than his counterparts in the most-disadvantaged fifth.

This has increased from 4.1 years in 2001, research by the Longevity Science Panel found.

Sixty-year-old women from the most advantaged fifth of neighbourhoods live 4.2 years longer than women of the same age from the poorest areas, up from 3.1 years in 2001.