Young people frozen out as UK house prices keep swelling
03-07-2016
UK house prices rose by 0.3 per cent in February, according to Nationwide. The year-on-year increase was 4.8 per cent, with both results coming in a shade behind forecasts.
Though the overall home ownership rate has begun to stabilize for the first time in about 12 years, home ownership has slumped drastically in the 25-34 age bracket during that period.
Robert Gardner, Nationwide’s chief economist, said:
While there was a marginal uptick in 2015, the proportion of younger adults who own their own home (currently 37%) remains considerably lower than ten years ago.
Over the same period, the proportion of people renting (either privately or through a local authority or housing association) increased from 43% to 63%. For 16-24 year olds, the proportion renting increased from 73% to 92% over the same period.
As Brits are so obsessed with house prices, it is perhaps no surprise that there are several different measures. (Halifax is due to put out its own data this morning too.) Pantheon Macroeconomics says that the Nationwide figures “underplay the extent to which the housing market is heating up again.”
Says Pantheon economist Samuel Tombs:
The latest growth rates of all the other main measures of house prices have been significantly stronger over the last six months. Nationwide’s index is based on its mortgage offers, so its weakness may reflect sampling issues. We still expect the strengthening labour market, falling mortgage rates and a dearth of homes for sale to result in punchy house price increases this year.
