86% of Renters Have Less Than a Quarter of the Deposit for Average First Home
An astonishing 86% of people renting property (over 6 million households) has less than a quarter of the deposit needed for an average first home, according to new analysis by the Equality Trust. Analysis of official Government statistics (Office for National Statistics) found that the vast majority of renters are locked out of home ownership through a lack of income and savings, with many unable to afford even the cheapest housing.
The Equality Trust found that:
· A third of households has no housing wealth
· 86% of renters (over 6 million households) have less than the £8,838.65 needed for even a 5% deposit for a mortgage on an average first home in the UK[1]
· 95% have less than the deposit (£35,354.60)[2] needed for a mortgage on an average first home in the UK.
· 87% have less than a quarter of the deposit needed(5% of total house value, or £10,452.70) for an average house in the UK[3]
· 78% have less than a quarter of the deposit needed (5% of total house value, or £3,629) for an average house in Burnley[4] (the local authority area with the lowest average house price)
However not everyone is locked out of the property market by high prices. The wealth of the richest 100 people in the UK increased by £15bn last year[5]. That alone could pay for 71,000 average priced homes. By way of comparison, there are around 50,000 households in Oxford.
Nearly a quarter of the richest 100 people in Britain last year accumulated their wealth, in part, through interests in housing[6]. They saw their wealth rise by £6.929bn, or the equivalent cost of 33,144 average houses.
John Hood, Acting Director of the Equality Trust, said:
“Our housing crisis is well documented, but it’s startling to see just how many people are priced out of owning their own home. At the same time, a small number of people at the top are making huge wealth from our dysfunctional housing market.
“This isn’t sustainable, and we need action from our politicians. That means reforming council tax, which hits the poorest hardest, and a substantial house building programme. Anything less threatens to lock a generation out of home ownership, and in to insecurity and punishingly high rents.”
Notes to editors
The Equality Trust is a registered charity that campaigns to improve quality of life in the UK by reducing economic inequality.
For additional comment or information please contact info@equalitytrust.org.uk
A full briefing note can be found here.
[1] The average house for a first time buyer costs £176,773. According the House Price Index April 2016 https://www.gov.uk/government/publications/uk-house-price-index-april-2016/uk-house-price-index-april-2016#headline-statistics
[2] This assumes a deposit of 20% is required
[3] The average house price is £209,054 according the House Price Index April 2016
[4] The average house price in Burnley is £72,583 according the House Price Index April 2016
[5] https://www.equalitytrust.org.uk/sites/default/files/resource/attachments/Wealth%20Tracker%202016.pdf
[6] This was calculated through Equality Trust analysis of the Sunday Times Rich List