Younger generation priced out of property market

A younger generation find themselves locked out of the housing market even as Feb figures show slight price fall

Young first time buyers have been hit hardest by high house prices (AP)

The percentage of younger home buyers has fallen drastically in the last decade according to mortgage lender Nationwide.

The 25-34 age bracket has traditionally included the greatest proportion of first time buyers. House prices have hit this group hardest, with the percentage joining the property ladder down 23 per cent in the last decade, according to mortgage lender Nationwide.

The figures show a marked decline in home ownership rates amongst 25-34 year olds from 59 per cent to 36 per cent between 2004 and 2014. Over the same period, the number of 25-34 year olds renting increased from 41 per cent to 64 per cent. In the 16-24 age bracket the proportion renting was up from 76 per cent to 91 per cent.

Half of these renters say it will take them five years or more to look at buying a property, Nationwide said.

Home ownership is now at its lowest rate for almost thirty years, eight percentage points below the all-time high of 70.9 per cent in 2003.

Landlords are doing well out of high house prices. Around 19 per cent of total households are privately rented – the highest number since the 1960s. Robert Gardener, Nationwide’s chief economist, said that the number of privately rented households has nearly doubled to 4.4 million while the proportion of households in social rental properties is down from 18 per cent to 17 per cent.

House prices surprised analysts by falling 0.1 per cent in February, after a 0.3 per cent rise in January. The average price of a UK house is now £187,964 while the average price in the capital is £458,283.

Gardener said it was too soon to say whether the February drop marked a turning point in house prices in the longer term.