The Social Mobility Commission conducted a study and found out that people intending to purchase their first house turn towards their parents for financial assistance for the down payment of the deposits. According to the commission, the numbers have increased from 20% in 2010 to 34% in 2017. The report also suggests, that currently, only 31% of the people in the age group of 25 to 29 years old managed to buy a house while the statistics were 63% in 1990.
The rest of the individuals cannot afford to purchase a house due to many reasons among which low income is the prime one. Increasing flat rates have worsen the inequality among the individuals and hampered social mobility. The report is based on the data collected by two universities– the suggestUniversity of Cambridge and Anglia Ruskin University and also data from the English Housing Survey which had collected data from 13,300 households.
The reporsuggests, the first time buyers turns towards their family and use ancestral properties to fund their deposits and people who doesn’t have any ancestral property or have weak financial back ground tend to take longer time than the usual individuals to purchase a house. Increased property rates have been another major issues which becomes an obstacle while purchasing a new house.
The current Government of Theresa May have been making constant efforts to increase the number of first house buyers and have laid harder rules and regulations on the landlords renting the house. The housing markets are really tough and it is predicted to stay similarly for a longer time until any drastic changes happens in the real estate market. Inflation has been increasing however the income of the individuals have been stagnant and increasing at a very slower rates thus widening the gap and increasing the number of individuals who cannot afford to purchase a house.
According to the sources, an equilibrium needs to be maintained among the increasing real estate prices and the salary of an individual in order to increase the number of first-time house purchasing individuals. The government needs to make some extra efforts by increasing the number of social housing, providing financial assistance and facilities by which more and more people are able to afford their first house without any financial assistance from their families.
It is clearly evident that the situation will require sufficient time to bridge the gap and maintain the equilibrium, but this couldn’t be possible without the additional efforts of the Government and the special focus on the housing development for the new generation.