Help to buy prices 250,000 private renters out of homeownership
Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Finance
Standard housing pictureImage: Housing via Shutterstock
Nearly 250,000 private renters have been priced out of homeownership since the government launched its help to buy scheme, new analysis has revealed.
The research, from PricedOut, the campaign for lower cost housing, shows that around 18,875 households (many of which have two earners) have used the scheme to date, but by stimulating a frenzy in the housing market which has pushed up prices for first time buyers by 8%, the government has made home ownership unaffordable for 245,000 people who could have afforded it before.
PricedOut used the HMRC’s percentile breakdown of UK taxpayer incomes, the English Housing Survey’s income profile of private renters, and the Office for National Statistics’ latest House Price Index to work out how many people could afford the average first home, based on the assumption that a home is affordable if it is no more than four times household income.
The total number of private renters who can’t afford the average home is now 3.48 million, or 66% of all private renters. With industry predicting a further rise of 8% this year, PricedOut has warned that another 160,000 renters could be priced out by the end of 2014.
PricedOut has now launched a new manifesto which calls for an end to rising house prices with a government target of 0% house price inflation, a programme of housebuilding, tax reform to deter property speculation and better rights for tenants.
PricedOut spokesman Dan Wilson Craw said: “The help to buy scheme is an utter travesty. The government reckon they have a policy that will help me and other young adults, but it’s managing to achieve the exact opposite, condemning thousands of us every month to a lifetime at the mercy of landlords.
“Help to buy is just part of a wider addiction to rising house prices where the wealthy see property as the fast track to greater riches. We need urgent action to end rising house prices and allow incomes to catch up. If the government can start by setting a target of 0% inflation, they’ll send a signal to speculators that this country will start treating houses as homes and not financial playthings.”