This House would make home ownership affordable.

Despite the recession, house prices are historically high. With many people lacking disposable income, houses are still as unaffordable as ever. As a result, the landscape of homeownership in Britain is changing. Since the 1920s, politicians on both sides of the spectrum have extolled the benefits of property ownership in a bid to instil responsibility, pride, and independence throughout their citizenship. Now, however, the post-war trend of owning rather than renting is on the decline. In the past six years, the amount of people renting privately owned accommodation in England has risen by 55%, demonstrating the difficulties many aspiring homeowners face trying to buy property for the first time.¹ Instead, buy-to-let landlords show signs of dominating the housing market. In the past year, the number of investors with a view to renting out their properties has increased by 42% in the United Kingdom, with nearly one in 10 of all mortgages going to private landlords². Many banks now require a deposit of one quarter of the value of the property in order to lend mortgages. As house prices are many times the average Briton’s income, it is increasingly difficult to get the capital together to put a deposit on a house, and so the average age of first-time buyers has leapt 33 to 37 over the last 3 years³.At the same time, higher mortgage costs and tighter mortgage criteria leave homeowners facing larger monthly instalments and, on top of ballooning energy prices and low real wage growth, there is a danger of more people defaulting on their mortgages in the years ahead⁴. This is particularly a problem in the United States, where rising unemployment presents an additional challenge. Although in the past, house prices in America have risen at a similar rate to rents, during the last period of the housing boom the ratio of house prices to rents grew at a rate of 78%. Similarly, the ratio of house prices to income has also increased significantly from the long term average. Whereas in 1952, the ratio of house prices relative to income was 100%, by the end of the housing boom in 2002, it had more than doubled to over 200%. As in Britain, this means that mortgage-holders are more vulnerable to any changes in the housing market⁵.