High house prices and rising interest rates are limiting access for young people to the housing market, with some of the most badly hit places found in the south west of England.
The report, Can?t buy: Can rent ? the affordability of private housing in Great Britain, written by Professor Steve Wilcox of the University of York using Hometrack data on house prices and rental levels, reveals that 16 of the least affordable areas for young working wannabe homebuyers are located in the south west, with house price to income rations ranging from 6.96 to 1 in Christchurch, down to 5.58 to 1 in West Devon. The least affordable authority in England is west London?s Kensington & Chelsea with a house price to household income ratio of 9.23 to 1.
But for those young people who can?t afford to buy, renting is becoming the new home-ownership. New analysis of the private rented sector reveals ?the cost of private renting is now much cheaper than the cost of buying, and as far as the supply of affordable housing is concerned, the rented sector is an important part of the solution,? points out Steve Wilcox.
In all regions and the majority of local authority areas, the costs of renting were significantly lower than the costs of buying a home. In England and Wales, private rents last year represented less than two-thirds of the level of house purchase costs.
Rent to income ratios are highest in London, where they are equivalent to 25.5% of average household earned incomes. In the south east the ratio is 22% and in the south west 21.2%, compared to the average for England as a whole at 20.5%.
?The affordability problems highlighted in this research are largely a result of an unbalanced and inflexible supply of homes, which has led to high entry costs for housing,? explains Richard Donnell, Hometrack?s director of research.
He adds: ?While the government recently set out new targets for house building, this shows the importance of developing the right kind of housing in the right forms of tenure. The private rented sector is taking much of the strain, and while the rental market has grown in recent years, it is clear this growth needs to be sustained to ensure adequate housing choice for those priced out of the market.?