Rising property values and wage growth stagnation are being blamed for the rise in the number of tenants who cannot afford to get a first foot on the housing ladder.
Campaign group Priced Out – which was set up to give tenants who are angry about the high cost of housing a voice – says an additional 1.2 million people have been prevented from taking possession of their own home since the coalition government came to power in 2010.
House price across Britain have risen 17% since the last general election, according to Priced Out. As a result, the proportion of private tenants who cannot afford to buy has risen from 54% to 69% during the lifetime of the coalition.
Priced Out’s figures show that almost 3.5 million taxpayers are trapped renting by unaffordable house prices. The pressure group says this represents an increase of 258,000 since March 2013 when the government launched its Help To Buy schemes.
More than 70,000 households have been helped onto the housing ladder through the Help to Buy scheme, which offers mortgage guarantees and deposit subsidies.
But for every one person who has bought a home with backing from Help To Buy over the past two years, another nine have seen house prices escalate beyond their reach, Priced Out’s figures show.
The group used official government data on income distribution and house prices for the calculations. It assumed a home was affordable if it cost less than four times a household’s income.
Priced Out director Duncan Stott says the coalition government had “presided over a massive corrosion of [first time buyers’] aspirations”.
“Throwing money at buyers with initiatives like Help To Buy is dangerously counter-productive,” he said.
“If the next government is serious about reviving home ownership, its top priority must be to set about building enough homes to end price inflation, otherwise more and more people will become stuck in a lifetime of renting.”
All the main political parties have pledged to increase housebuilding, but on the eve of the general election property search portal Zoopla says the Labour Party’s housing policies will “make UK property a generally less attractive investment”.
Property will appear less attractive to owners as a result of proposed new property taxes, less attractive to landlords and investors as a result of proposed new rent controls and less attractive to first-time buyers and lenders as a result of proposed changes to current government support schemes, says Lawrence Hall, Zoopla’s head of public relations.
“The follow-on impact of falling house prices and lower consumer spending to the overall economy could be significant,” he warns.