Call for urgent action over house prices

7 June 2007

There’s a warning that the next generation of homebuyers could face average house prices that are 10 times their salaries, unless the number of homes being built increases. 

Research from the newly-established National Housing and Planning Advice Unit (NHPAU) found that more than a third of people who are renting think they will never be able to buy.  A further fifth believe that it will take them at least five years before they are in a position to take their first steps on the property ladder.

In 2000, the average cost of a home was four times annual earnings.  Steep rises in house prices meant that by 2006, the typical homebuyer was looking at a home that was seven times his or her salary.

The NHPAU predicts that this will rise again unless supply increases.  By 2026, it estimates that house hunters will be faced with average prices 10 times their yearly earnings.

Professor Stephen Nickell, who chairs the group, said that demand for housing was growing, and unless action was taken, pressure on the market would only get worse.  He said:  “There is a clear need for more ambitious and urgent delivery, if we are to make homes more affordable for our children.”