Millions think they will always rent
07/06/2007 - Renting may be the only option for millions
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In 2000, the average cost of property was four times annual earnings but steep increases in property prices mean the typical buyer would be looking at seven times their income. A lack of housing stock has made the situation worse as home builders are building at the lowest level since the Second World War partly due to restrictive planning gains stealth tax. Four interest rate rises in the past year have made it almost impossible for people to step up on the ladder when the cost of an average home in the UK has now reached £200,000. It is predicted that over three million of people in their thirties will be unable to ever afford their own home and will spend all their lives renting.
Latest figures from the Council of Mortgage Lenders show that first time buyers are being squeezed out of the market and once they have a mortgage it will account for 18.3 per cent of their gross income on mortgage interest payments, up 2 per cent on last years figure. The proportion of first time buyers' salaries taken up by mortgage payments is at it highest since 1992. The average household is currently spending around 19.9 per cent of its take home pay on mortgage payments.
