Millennials are struggling to buy a home - but is it actually getting easier?
Summary
Many young people in the UK find it hard to buy a home because house prices have risen faster than incomes for decades. The shortage of new homes, rising building costs, and strict planning rules have made it harder to build enough houses, though recent changes may slowly improve the situation.Key Facts
- About 25% of people born in the mid-1990s in the UK own a home, compared to much higher rates for older generations.
- House prices have increased much more than incomes over the last 70 years.
- England needs around 300,000 new homes each year to meet demand, but only about 208,000 were built last year.
- Building costs have risen due to inflation, material shortages from the Covid-19 pandemic, and price hikes in energy after the Ukraine war.
- Skilled construction workers are in short supply, worsened by Brexit.
- Saving for a house deposit is harder because many young people also pay high rents that take up about a third of their income.
- Recently, house prices have grown more slowly than wages, and some lenders now accept smaller deposits and offer longer loans.
- The government plans to simplify planning rules and allow more building on protected land to increase house supply, but any effects will take years to appear.
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