House prices in England will soar by 42% by 2020 and rents will rise by even more, according to a report from the National Housing Federationwhich warns of the “colossal strain” facing the generation born in the 1990s.
Many will remain trapped in their parents’ homes as property prices continue to outstrip earnings, warns the NHF. It forecasts that 3.7 millionyoung people will be living with their parents by 2020, as the rate of housebuilding fails to keep up with the rising population.
“By 2020 the price of a first-time buyer’s home will increase by 42% to £245,165. Although wages for 22- to 29-year-olds will increase by 36% by 2020, this poses a huge challenge for those wishing to be homeowners. Low-earning young people would have to spend 16 times their average wage just to buy a home,” said the NHF report.
Rents will be driven even higher as young adults are priced out of the property market. “NHF research shows that private rents are likely to be broadly stable through 2013, but could increase sharply, by about 6% a year, between 2015 and 2020 as interest rates and house prices rise. In 2020, rents are expected to be 46% higher than today. But when the new flood of young adults born in the noughties starts university or a new job, they could push rents even higher in a country already chronically short of decent housing.”
House prices and rent in England to surge by 2020, warns report | Money | The Guardian.