Study warns of housing crisis

The housing market is in crisis as home ownership tumbles and house prices soar, a study has warned.Home ownership in England will slump to just 63.8% over the next decade – the lowest level since the mid-1980s, the National Housing Federation’s forecast, published yesterday, said.Huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline, the federation said.The Housing Minister, Grant Shapps, admitted that “we have not been building enough homes”, but insisted the government was “in the process of reversing that through massive planning reform” and a “massive programme” involving the release of thousands of acres of public land to build new homes.The National Housing Federation, which represents England’s housing associations, warned that the housing market will be plunged into an unprecedented crisis as it also forecast steep rises in the private rental sector and a house price boom. It blamed the bleak outlook on an under-supply of homes in the UK.The chief executive, David Orr, said: “With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it’s time to face up to the fact that we have a totally dysfunctional housing market.“Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy.“And for the millions locked out of the property market, the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels.”Shapps said the reason house prices had become so unaffordable was a tripling of prices in the space of 10 years from 1997 to 2007, which put them out of reach for many people.