Millions of people are being priced out of buying a property due to high house prices, the latest figures suggest.
A dearth of homes for sale is a major contributing factor to growing property prices, leaving many people with no option but to rent, creating intense competition in the private rental market.
There are now more households than ever before living in the private rented sector in the UK, and the latest house price data suggests that the level of people residing in the PRS is likely to rise further moving forward.
First-time buyers are now having to save almost £33,000 for a deposit according to the Halifax, and the mortgage lender’s latest house price index shows why that is the case.
House prices in the UK fell by 1% in June, the largest monthly fall since January, according to Britain’s largest lender, and yet the average price of a home in the UK now stands at £218,390, which is up 2.6% year-on-year.
“Whilst demonstrating our market’s resilience during times of uncertainty, house prices are continuing to increase year-on-year and at a rate that is well above any wage increase,” said Jeremy Duncombe, Director, Legal & General Mortgage Club.
In London, some first-time buyers are now required to fork up over £100,000 for a deposit, and that is simply “not acceptable”, according to Duncombe.
He continued: “Many would-be homeowners are now turning to the private rental sector to find more affordable accommodation. Nearly a quarter of households are set to be owned by private landlords by 2021.
“The lack of affordable housing is a problem that will only worsen if the government doesn’t implement the revolution in housing policy it previously promised.
“With the dust now beginning to settle after the general election, we want to see a real push to build the thousands more homes that this country desperately needs, whether that be for prospective homeowners or renters.”