Homes 'costly' for young families

Many young English families are facing problems getting onto the property ladder, with a new survey revealing that three-quarters of families find buying a suitable home too costly.

Only 26.1% of families under 40 were found to have the funds to purchase a home, with parts of London and the South East recording figures of as low as 5%, according to an analysis by the National Housing and Planning Advice Unit (NHPAU).

First-time buyers have had to face soaring deposits, with average payments increasing from 16% of annual income in 2000 to 64% in 2009.

As mortgage lenders slashed the loan-to-value ratios - the amount borrowed in relation to the property's value - they were prepared to lend at, affordability had worsened last year, the report said.

Following the report, the Tories slammed the Labour party and said the data proved their "complete and utter failure" on housing policy.

Two studies from the NHPAU - Housing Affordability: A Fuller Picture and Evaluating Requirements for Market and Affordable Housing - provide a detailed analysis of housing affordability.

The second study, prepared by York University's Professor Steve Wilcox and Heriot-Watt University's Professor Glen Bramley, revealed that just 26.1% of families under 40 could afford to buy a three-bedroom house in England in 2008, a 2.6% rise on the previous year.

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