Research shows that 350,000 new households will be excluded from the housing market over the next five years, even if the government meets its current target for house building. According to estate agents Savills, 70,000 new households a year will be unable to afford to rent or buy housing at a market rate unless assisted […]
Research shows that 350,000 new households will be excluded from the housing market over the next five years, even if the government meets its current target for house building.
According to estate agents Savills, 70,000 new households a year will be unable to afford to rent or buy housing at a market rate unless assisted over the course of the current parliament.
This means that 350,000 households in England will need some form of sub-market housing by 2020, based on the assumption that 30% of gross household income is spent on housing.
The problem is worst in London, where up to 26,000 households could be priced out of the market. In the South East 11,500 households could be excluded, with about 4,500 households in the West Midlands.
This could see those with household incomes of £60,000 unable to afford property in parts of London, although the median is £20,000. In contrast, the median income of these households in the north is only £8,000 per annum.
Chris Buckle, associate director at Savills research, said: “There can be no question that we need to boost housebuilding volumes, but these new homes need to be built across a variety of tenures to put homes within reach of those in greatest need.
“Our concern is that new policy will result in a greater shift from sub-market rental products towards more expensive shared ownership and Starter Homes accessible only to those on middle incomes.”
Government figures revealed last week that 170,690 new homes were built in England during the past year. This still falls significantly below the 250,000 homes experts believe are needed to be built each year in order to meet demand. The government is currently aiming to build around 200,000 new homes a year.
