The renting market boom looks set to continue for several years as UK adults could be well into their 40s before being in a position to purchase a home.
The latest report from the Bank of England suggests that, as the shortage of housing becomes a wider problem, potential homeowners may have to wait longer than ever to get a place of their own.
David Mile, a leading British economist, claims that prospective homeowners typically start thinking about buying their first house when they are 28 years old.
On the current average income, it would have taken a 28-year-old up to four years to save for a 5% deposit before the financial crisis hit the UK in 2008.
As banks typically require a 20% deposit nowadays, estimations suggest that it could take up to 16 years to save in the current climate.
This would mean the average first time buyer could be 44 years old before they are in a position to purchase a property.
The housing shortage is fast becoming a serious issue in the UK as the cost of rent is now at a record high.
The average price of rent is £720 and over £1000 for London, eating away at any savings tenants could use for a deposit. Meanwhile, anyone renting who is actually able to save at the same time could be in for a long wait.
Thousands of families face repossession and homeowners trapped in negative equity can’t make the next step. The average level of real house prices has fallen by around 20% since September 2007, according to the Bank of England. The stagnant housing market is not helping the situation either as house prices continue to fluctuate on a regular basis.
Homeownership has fallen to just 67.4% compared to 2003, when it was 70.9%.
The government has taken note of this by setting out a radical proposal that will create thousands of new properties, reduce deposits to as little as 5% for new builds, provide funding for builders and re-introduce the Right to Buy Scheme.