How Affordability has Changed over the Previous Decade – Millenials Spend 3 x More then their Grandparents on Housing
Research by the Resolution Foundation think tank has found that young people are spending three times more on housing than their grandparents did.At the age of 30 millennials spend 23% of their annual income on housing costs, compared to those born 1926–1945 who, aged 30, spent just 7%.
The post war baby boomers now benefit from record levels of outright ownership, but there are now as many young families (aged 25–34) living in the private rented sector as owning a home or living in the social rented sector combined (36%).
While the number of mortgage loans issued to first-time buyers over the past year is at its highest level since pre the financial crisis, the average age of a first time buyer looks set to continue to rise over the coming years.
It’s therefore cold comfort to those of us in the South-East that homes across more than half of the UK are more affordable now than before the financial crisis according to new research by the Yorkshire Building Society who analysed changes in local house prices and earnings since 2007.
The gap between the least and most affordable parts of Britain has doubled over the last decade, with housing affordability having fallen across all of London’s 32 boroughs.
Homes in cities including Birmingham, Newcastle-upon-Tyne, Leeds, Harrogate, Edinburgh, Liverpool, Cardiff and Exeter are now more affordable than they were 10 years ago, while across Cambridge, Oxford, Bristol, Manchester, Nottingham and York property price rises have outstripped wage growth.
With the communities secretary announcing a new methodology for new build development based on household projections and affordability criteria, local authorities with high affordability ratios could be expected to build up to 40% more than their current targets. Perhaps the West Oxfordshire Local Plan will be examined further?