Fewer and fewer young couples will be able to afford to buy their first home together in the future, a new report has predicted.
The Joseph Rowntree Foundation has called for urgent reform in the UK housing market, including stepping up the building of new homes.
It has estimated that if the current rate of house building continues – around 150,000 new builds are completed each year – the proportion of couples aged 30-34 years old in the position to buy a home together will fall from 56% currently to 28% in 2026.
With many of today's first time buyers having to turn to their parents for assistance, it is thought that the current housing system could contribute towards pension poverty in the future.
"As parental assistance has become increasingly necessary for younger households to purchase their first home, there is strong likelihood that wealth inequality will be transmitted down the generations," said the report.
"There are also knock-on effects. For example, in their later years, when most home-owners have repaid their mortgages, they experience low housing costs. In this way, home-ownership mitigates pensioner poverty.
"Households excluded from ownership now may not be able to catch up to their peers (by buying their own homes later in life) and this could create an increasing burden for the state when members of these households reach retirement age."
In the report, the foundation has called for a number of measures, including:
Since the beginning of the economic downturn in 2007, first time buyers have faced an uphill struggle.
Lenders have been reluctant to lend to buyers without a substantial deposit, although a few new deals available to people with just 5% have been made available recently.
In addition, a policy was recently announced that will allow buyers with small deposits to take a loan jointly provided by the Government and house builders, taking the size of their down payment to 25% of a property's value.
By putting down a bigger chunk of equity, buyers will have smaller repayments.
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