Taylor Scott International News
The UK housing market is seeing increasing demand and limited supply and first time buyers are finding it increasingly difficult to get on the property market, according to a new analysis. Since 1980, there has been considerable fluctuation in the UK housing market and while house prices have been increasing, home ownership among younger age groups generally has declined. The analysis from the Office of National Statistics also shows that if the number of households in England grows to 24.3 million in 2021 as projected, this would be equivalent to an additional 221,000 households per year. Housing is therefore likely to remain an important topic in the future. Overall, the UK housing market comprises 27.8 million residential properties, the report says. Linked to income, wealth and availability of lending, the housing market is sensitive to the overall economic climate. On average house prices have increased by 6.9% per year since 1980 and the greatest annual increase in house prices was 25.6% in 1988. In 2013, the average price (mix adjusted) of a property in the UK stood at £242,000. There were seven years between 1980 and 2013 where, on average, UK house prices fell, the majority of which occurred during the recession of the early 1990s. The biggest drop, however, was 7.6% in 2009. The economic downturn in 2008 had a considerable impact on the UK housing market. The decline in house prices was accompanied by reduced mortgage availability and stricter lending criteria, and this is a major reason in the UK for the continuing low level of housing transactions. The number of property sales in the UK almost halved from a peak of 1.67 million in 2006 to 0.86 million in 2009. Since 2009, however, the number of sales has partially recovered, increasing to 1.07 million in 2013. The report points out that rising house prices could partially explain the decline in the number of first time buyers taking out a mortgage. Between 1980 and 2002, the number of mortgages agreed for first time buyers was averaging around 486,000 per year. However, in 2003 there was a 31% decline in the number of mortgages for first time buyers from 2002. It also shows that in 2008 saw a further 47% decrease from 2007 as the effects of the economic downturn impacted on the housing market. While some recovery in the numbers of first time buyers has been apparent in 2013/2014, the level remains below the average seen prior to 2003. The report says that the reduction in the numbers of first time buyers has subsequently had an impact on the age of home owners. In 1991, 67% of the 25 to 34 age group were home owners. By 2011/2012, this had declined to 43%. There were also reductions in home ownership over the same period for the 16 to 24 age group from 36% to 10% and for the 35 to 44 age group from 78% to 64%. By contrast, home ownership has increased among… Taylor Scott International
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