David Cheskin/PA Wire
A study has revealed today that millions of families will have to save for more than 30 years to get themselves onto the property ladder.
The research, conducted by think-tank Resolution Foundation, found that the crippling impact of high property prices has made the demand for large deposits so great that it could take as long as 31 years for a family to stump up the money.
As a result many have little chance of ever being able to get their foot on the property ladder.
The report, published today, highlights how families forced to rent end up paying such extortionate prices that they are left with far less to save towards a deposit as a result.
With rents reaching an all-time high in Britain and the private lettings industry still largely unregulated - except by voluntary codes of conduct - families are at risk of being ripped off by ruthless agents, and left with very little to save for a deposit.
The research found that the up-front costs of renting a one-bedroom flat – including a deposit, letting agency administration fees and a month's rent in advance – can total nearly £2,200.
The report considered low to middle-income families bringing in between £12,000 and £42,000 a year. It established an average of £18,600 and assumed a family with this income saves 5 percent of it every month to purchase a first-time buyers' home costing £125,000.
Putting away £930 a year, it would take them 31 years to save the deposit of £28,750 – or 23 percent of the price of the house – required to get a mortgage. It warned that by this stage, property prices could have climbed even further out of their reach.
A leading member of the Bank of England, David Miles, who sits on the Bank's interest rate setting committee has said that many young people will have to wait until they are 44 to buy.
The third leading financial expert to warn of Britain's falling rates of home ownership, Mr Miles said he understood most people put 'great value on having a home that they can reliably call home for many years', but warned that many will have to bury their dream.
Mr Miles said: 'It will take time for first-time buyers to accumulate larger deposits, so they will typically buy later and the share of home ownership will be lower.'
In another recent report, Paul Smee, director general of the Council of Mortgage Lenders, said that many people will spend far longer renting than they had ever imagined, and described home ownership as an 'unrealistic assumption' for many people.