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Home ownership in England to fall

Aug 30 2011 14:36
AFP

London - Home ownership in England will slump to its lowest level since the mid-1980s in the coming decade due to soaring prices and a shortage of new houses, a study warned on Tuesday.

England has long had a culture of home ownership, with buying a house seen as a rite of passage into adulthood and far more common than in many other European countries.

But ownership will drop to just 63.8% by 2021 from 67.8% in 2010, warned the study by the National Housing Federation, which represents housing groups that provide low-cost homes.

Ownership peaked at 72.5% in 2001, according to the federation.

High prices, huge deposits and strict lending criteria were making it impossible for many to get a foot on the housing ladder, and the government was failing to invest enough in new, affordable homes, said the study.

The average house price in England will rise by 21.3% over the next five years from £214 647 ($350 300, €243 000) in 2011 to £260 304 in 2016, according to economists commissioned to produce the forecasts.

Federation chief executive David Orr criticised England's "totally dysfunctional housing market".

"Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy," he said.

"And for the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels."

Orr urged the government to address a shortage of new homes.

"Despite the overwhelming need to increase supply, house building has slumped to a 90-year low, plunging the country even deeper into the mire," he said.

Housing Minister Grant Shapps said the government had introduced a scheme to help first-time buyers onto the home ownership ladder and taken measures to release swathes of public land for housebuilding.

Shapps said he was "determined that we pull out all the stops to give hard-working first-time buyers the help they need."

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