Homeownership has been falling in the UK, where ownership was 27% low for those under people 35 years as compared to 65% in the 1990s. Now the house prices are 7.8 times the average earnings in England and Wales.
Homeownership is less in the country than in France and Germany, which indicates the crisis is widely affecting young earners.
It also indicates the government needs to create policies to change the current regulations restraining the new buyers from investing, like a concession on stamp duty or others.
Previous changes in policies that made landlords eliminate tenants who complained of poor living conditions instead indicate the steep issues linked to the housing crisis.
A recent Ipsos Mori survey (for the CIH) found people find the housing crisis has been personally affecting them where renters / those living with parents think they may be unable to buy their own home.
Over 70 per cent believe there was a housing crisis in the country. One-third of the private renters worry that they will have to leave the area due to unaffordable costs, and 61% think they may never be able to buy a home.
After the financial crisis, the supply was low, and a fall in supplies created a shortage of over 300,000 homes a year. As a result, the government claims "it is required to build new homes to increase the supply, but even after building 300,000 homes a year, the supplies may not be adequate to meet the growing needs."
The inflation prices, the stamp duty and lower wages compared to the home price lead to unaffordability. In addition, the confusion created by Brexit delays aggravated fears that sellers are not posting their properties.
The Help-to-Buy scheme, expected to close in two years, helped new buyers to come into the market. Nonetheless, the government faces huge liabilities, which could pose a market risk, especially in a disorderly Brexit, where the prices can drop further.
Rents Continue to Grow
Rents are constantly increasing; even though; the UK housing markets have slowed in the past years, people, on average, are spending over 36 per cent of their wages on renting.
Buy-to-let mortgages with low rates, easy evictions, generous tax breaks, uncapped rents and the inability of the young workers to buy homes due to the huge difference between the wages and the home price have created opportunities for the homeowners.
Some leading agencies' reports find that rents grew 16% in the 13 years from 2002 to 2015, and wages grew 2%.
The government gives power to the homeowners to evict a tenant without a good reason, which makes it difficult for the renters to go against the landlords, and this raises the official homeless people condition where people are even opting for sofa surfing or sleeping in sheds, vehicles or cars, as becoming a landlord is more expensive.
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