Average House Prices To Hit £1m In 20 Years
05-02-2014
The average house price will hit nearly £1m in a generation and as people are forced to rent Ed Miliband gets tough on landlords.
By Anushka Asthana, Political Correspondent
House prices are set to quadruple over the next two decades reaching over £900,000 and forcing millions to stay in their childhood bedrooms well into their thirties, a study has warned.
The report from KPMG and Shelter claims that over half of all 20 to 34-year olds will be living with their parents by 2040.
Others - also locked out of the housing market by spiralling prices - will have to rent long-term.
A separate report from Nationwide reported property prices had leapt by 10.9% year-on-year in April - the first time in four years that annual growth has hit double figures. It is the biggest annual price increase since 2007.
It comes as Ed Miliband promises to drive up the standard of the private rented sector, introducing a cap on private sector rent increases, as landlords become his latest "vested interest".
The Labour leader will warn of "terrible insecurity" for those renting because of poor standards in the sector, and the threat of sudden increases in price.
"The next Labour government will legislate to make three-year tenancies the standard in the British private rented sector. Tenants can't be surprised by rents that go through the roof."
A pedestrian browses properties outside an estate agent.
Buying a home is out of reach of an increasing number of people
Critics said it sounded like 1970-style rent controls, a charge rejected by Labour.
The KPMG and Shelter report argues that the only answer is a "radical programme of house building". It calls for a range of policies that it believes can help including:
:: More power for planning authorities to create “new home zones” where development can be accelerated
:: Charging "council tax" on land that has been left dormant but on which building should have taken place – to try to unlock stalled sites
:: Helping small builders back into the house building market.
The study gives the example of Andy from Enfield, a 28-year-old living with his wife in his parent's house along with his brother and partner.
He said: "If you'd asked me when I was 21 and graduating, I'd have hoped to own some sort of property with a few years. It's sad that even though we're living with my parents and saving as much as we can, this is still so far out of reach."
Campbell Robb, chief executive of Shelter, said: "The thousands of young people and families forced to watch their dream of a stable home slip further out of reach are already paying the price for successive governments' failure to build the homes we need. With housing now a top issue for voters, politicians of all parties are rightly beginning to feel the need to act."
Marianne Fallon, UK head of corporate affairs at KPMG, added: "What is clear from our report is just how big and messy our housing problem is. For many people, particularly those in their twenties, the aspiration of owning their own 'castle' is fast becoming a fairy tale."