House price index is ‘massive problem’ for young people
The latest rise in house prices “doesn’t reflect reality” for much of the country, according to a leading housing and homelessness charity.
The 11 per cent increase in the cost of buying a home means younger people especially will struggle to get on the property ladder, Shelter Cymru says.
The situation is “unsustainable”, says Rob Simkins, Campaigns Manager at Shelter Cymru.
“No matter how much money I put into an ISA every month to save for a house, it’s never going to be enough,” Mr Simkins.
“It demonstrates the need for a wider conversation around housing.
“I think we’re starting to get there… but we’re perhaps at risk of creating a different tier of people who receive that increase very differently.”
What does the data show?
Building society Nationwide released its latest house price index figures, which found house prices have risen by an average of 11.2 per cent across the UK.
It is the strongest start to the year for the housing market since 2005.
The report also found prospective house buyers will need at least half a year’s salary to afford a deposit.
The average house price across the UK in January 2022 was £255,556, compared to £254,822 in December 2021.
‘There needs to be a serious recognition of the scale of this issue’
Mr Simkins said there was scope for the government to ask fast on issues such as the growing cost of living and housing crisis, citing the quick decisions that were implemented by governments during the coronavirus pandemic.
“I’m not suggesting that me being stuck in a rented flat is anything of the same scale as a pandemic, but the impact this is having on generations across the UK is getting pretty entrenched now and it’s only going to get worse.
“I think there needs to be a serious recognition of the scale of this issue and the generational sort of inequalities it’s perpetuated.”
Robert Gardner, Nationwide‘s Chief Economist, said: “Housing demand has remained robust.
“Mortgage approvals for house purchase have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.
“At the same time, the stock of homes on estate agents’ books has remained extremely low, which is contributing to the continued robust pace of house price growth.”