Shelter: 1.8m priced out of housing market
A new report from Shelter revealed a swathe of ‘squeezed middle’ families facing years of private renting, or trapped on the first rung of the property ladder.
An estimated 1.8m family’s fall into this group, yet the study shows that almost three-quarters of these families are priced out of the traditional market.
Even with the coming Help to Buy mortgage guarantees, 78% of these families will still be unable to afford the repayments on a family-sized home.
This means that the only option for many will be years in the insecure private rented sector, paying out dead money in rent.
In contrast, the report finds that mortgage repayments on a shared ownership home would be affordable for 95% of families on low or middle incomes.
Shelter is now calling for a major new housebuilding programme of shared ownership homes to revolutionise ownership for ‘forgotten families’.
This would allow families to find an affordable home of their own, and provide a real alternative to the confusing ‘postcode lottery’ of existing small-scale schemes, or the overheated private rental market.
The report shows that investing £12bn (less than 1% of GDP) could build 600,000 new shared ownership homes – enough to give almost half of England’s private renting families the chance to own their own home.
Previously business secretary Vince Cable has called investing in homes like this ‘a no-brainer’.
Kay Boycott, director of campaigns and policy at Shelter, said: “We need to see a new generation of shared ownership for the ordinary families locked out of social housing and priced out of home ownership.
“The reality is that soaring house prices mean that the traditional market is no longer working for ordinary people.
“Building the new shared ownership homes we desperately need is the only way to give thousands of families a stake in the stable home they want at a price they can afford.”
Article courtesy of Mortgage Introducer