Young UK workers still struggle to become homeowners, study finds

New research suggests that entering the UK housing market remains a difficult challenge for young workers. The study quantifies the proportions of younger working households who cannot afford full ownership in the open market across 360 UK local authority areas.

The research, released by the charitable organization the Jospeph Rowntree Foundation and complied by Professor Steve Wilcox of the University of York, found that in 40 local authority areas, 40% or more of all younger working households can afford to pay more than a social sector rent, but still cannot afford to buy at the lowest 10% of local house prices. These authorities are spread between London (13), the South East (15) and the South West (11), joined by Ryedale (Yorkshire & Humber). The least affordable areas are Weymouth & Portland, Bournemouth (both Dorset), South Buckinghamshire, Carrick (Cornwall), Kensington & Chelsea and Harrow (both London). Affordability is most problematic in London, with house-price-to-household-income ratios lower than four to one in only two areas (Bexley and Havering). Outside London, affordability is as problematic in the southwest as in the southeast. By contrast, in 13 areas, only 1% or less of all younger working households cannot afford to buy at the lowest decile point of local house prices. Financial support for home-ownership in those areas might best be justified in terms of social inclusion or regeneration objectives rather than in terms of affordability. The research suggests redefining intermediate housing markets as 'working households able to pay a social rent without relying on housing benefit, but unable to afford to buy at the lowest decile point of local house prices'. This market comprises just over a fifth of all younger working households in the UK, ranging from 35% in London to just 7% in the northeast of England.