Hometrack has found that just under a quarter of young working households have little chance of accessing home ownership in their local housing market.
Its research says that high house prices and rising interest rates are increasingly limiting access to the housing market with some of the worst affected areas in the South West of England.
The research also sets out new analysis that highlights how the cost of renting is cheaper than buying.
The report, Can’t buy: Can rent – the affordability of private housing in Great Britain, has been written by Professor Steve Wilcox of the University of York, using Hometrack data on house prices and rental levels. The findings present a comprehensive and detailed analysis of the state of housing affordability across every local authority in Great Britain and builds on earlier analysis conducted for the Joseph Rowntree Foundation between 2002 and 2005.
The report identifies the proportion of young working households who are unable to access the property market in their local area at the lowest level – the so called Intermediate Housing Market.
Regionally the South West has the greatest proportion of young households priced out of the market (34 per cent) followed by London (31.5 per cent) and the South East (30.2 per cent).
Scotland is the most affordable area with 15.8 per cent of young working households priced out of the market.
Hometrack’s director of research Richard Donnell says: ‘The affordability problems highlighted in this research are largely a result of an unbalanced and inflexible supply of homes which has led to high entry costs for housing. While the Government has recently set out new targets for house building this research highlights the importance of developing the right type of housing in the right forms of tenure. The private rented sector is taking much of the strain and while the rental market has grown in recent years, it is clear that this growth needs to be sustained to ensure adequate housing choice for those priced out of the market.’