Pricing our younger generations out

The most striking and well publicised example of the damage being inflicted by unaffordable house prices is the plight of the UK's first time buyer. The number of first time buyers managing to make in onto the housing ladder is at it's lowest level in 25 years.

The number of areas of the UK they are priced out of is increasing at a frightening rate with 85% of towns unaffordable for first time buyers.

Those who do make it onto the ladder are getting increasingly older, having to accumulate and spend more of their savings whilst taking on crippling mortgage debts. They are being forced into taking significantly higher financial risks than any previous generation.

Moving up the ladder

Home owners are affected too. The majority of home owners, those moving up the ladder, are now having to plough more of their incomes into their next homes as increasing prices stretch the gaps between the rungs of the ladder.

In fact rising house prices only benefit a small minority of the population - speculators and older home owners who are trading down. Although in practise most older home owners, quite rightly, do not want to leave their family home and never trade down.

Wider implications

Setting aside the obvious direct impact on those purchasing properties there are much wider social and economic implications that affect everyone in the UK, home owner or not.

Families and the "baby deficit"

Recent research has highlighted that 5% of first time buyers have delayed starting a family due to house price pressures. However this is not just a problem for just first time buyers.

High prices are acting as a disincentive against starting a family young, leading to postponement or abandonment of having children. Couples are pushed into having children later in life when their fertility rates are lower, stretching the gap between generations and lowering the national birthrate.

This is happening at a time when the country desperately needs to encourage couples to start families to deal with the ticking time bomb of an ageing population.

High prices force families to become increasingly reliant upon two salaries to service newly acquired mortgage debts thus increasing the financial risks should one parent become ill or unemployed.

Economics

The economy at large can also suffer from high house prices. One of the most widely publicised examples is the difficulty in attracting key workers to areas where prices have risen highest.  This has led the government to introduce tax payer subsidised house benefits for a small minority of government employees (Key Worker Schemes).

The rises inevitably lead to an over-concentration of investment into housing rather than in more productive areas such as investment in companies. The most tangible results of this are the Buy To Let gold rush which has been an unwelcome feature of the last few years. The flood of property speculators entering the market has simply exacerbated the price problem and made things markedly worse for home buyers.

Increasingly the house price boom is leading people to rely upon their homes as their sole pension strategy, making them complacent about saving and putting money into investment based pension funds, leaving them very vulnerable if their single strategy does not pay off in the future or if they do not wish to leave their hard won home later in life.

It's time for a change

Unaffordably high house prices are directly or indirectly hurting you, your children, your family and your friends. Join us in our campaign for a healthy, affordable and sustainable property market which caters for the needs and aspirations of families across the country.