costs to income for first-time buyers are now higher than levels at the 1990s
housing boom peak, says the Building Societies Association.
First-time buyers
were devoting nearly 35% of their income to mortgage costs by the third quarter
of 2007, compared with the previous high of nearly 34% in 1990, the UK Housing
Review indicates.
The Review by the
Chartered Institute of Housing and the BSA, published today, shows increasing
numbers of households are moving into private rented housing.
It says a
sharp rise in house prices and mortgage costs over the last decade contrasts
with the pattern of private rents, which have kept pace with earnings.
This has resulted in
substantially lower rents than mortgage costs.
The Review attributes
rapid growth in the private rented sector to competitiveness of private renting,
as opposed to owner-occupation and the greater choice available to households
seeking such housing.
Steve Wilcox, professor of housing policy at the
University of York and author of the review, says: "Private renting has become
far more competitive as an option for households compared to the cost of buying.
"The sector has
grown by 21% in the last five years across the UK and is fulfilling a
significant role in the housing market."
Adrian Coles,
director-general of the BSA, says: "With first-time buyers finding it
increasingly difficult to get a foot on the housing ladder, the private rented
sector is providing good quality accommodation to increasing numbers of people."
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