Homeowners to be replaced by tenants

| March 4, 2010 | 0 Comments

Reporting on its recent “Future Housing” conference the Council of Mortgage Lenders (CML) says it expects the UK to see a smaller proportion of homeowners and a higher proportion of tenants, mostly in the private sector, in the years ahead.

Changing consumer preferences and affordability pressures will drive the trend.

Examining the plight of first-time buyers, the CML’s head of research, Bob Pannell, estimates that to get a foot on the property ladder, today’s first-time buyer needs to a deposit of around £34,000, despite falling house prices.

Three years ago, the deposit required to enter the market was a much more manageable £12,700 and the difference can be attributed to tighter lending criteria.

Meanwhile “a chronic lack of supply of housing of all tenures seems set to persist”, the CML reports.

The lenders’ body suggests that private sector funding constraints and public sector cutbacks are likely to produce a significant shortfall in the supply of both housing finance, and housing itself.

Between 1999 and 2009, the number of new homes built each year ranged from around 130,000 to around 170,000.

However, the Government’s National Housing and Planning Advisory Unit estimates a range of 238,000 to 290,000 new homes are needed per year to meet housing need.

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