8th May 2009
By Neil Merrick
House prices will remain beyond the reach of many first-time buyers once the credit crunch and recession end, government advisers warned this week.
Large gaps in wealth and a housing market prone to ‘boom and bust’ mean there is no prospect of long-term affordability problems easing, according to a report commissioned by the National Housing and Planning Advice Unit.
In addition, the shortage of new homes will be more acute following last year’s dramatic downturn in the house building industry, said the report by the University of York’s Centre for Housing Policy.
Affordability — more than just a housing problem, published on May 5, said parents were increasingly helping their children to pay for their first house, so that the children of existing homeowners represented a growing proportion of new purchasers.
‘We are in danger of creating a more polarised society,’ said Neil McDonald, chief executive of the unit. ‘We must not be fooled into thinking that the current fall in house prices means the problem is solved.’
