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Housebuilding shortfalls and construction costs squeeze first-time buyers
About 208,000 homes were added last year in England, far below the government estimate of roughly 300,000 dwellings needed annually to match population change.
BBC Business reports that people in the UK born in the mid-1990s have about a 25% chance of owning a home, with younger adults in the 1990s nearly twice as likely to be on the housing ladder as today.
The outlet links the difficulty for first-time buyers to supply constraints, saying changes in mortgage markets have contributed but ultimately points to a lack of housebuilding. The government previously estimated England needs another 300,000 dwellings per year, but only 208,000 were added last year, and the UK has not built close to 300,000 new homes in a year for at least three decades.
Rising construction costs are also highlighted as a key driver, with raw materials such as timber, steel, plasterboard, concrete and insulation tracking general inflation until the Covid-19 pandemic, when sourcing became harder. BBC Business adds that the war in Ukraine drove up energy costs by 15% in a single year for making materials and for construction, and that it says the war in Iran has pushed prices further.
The article also cites pressures on builders, including persistent skilled labor shortages and added planning costs from strict environmental and safety regulations. It estimates that a home costing £150,000 to build in 2015 may cost £230,000 now, with analysts warning costs could rise by another 15% in the next five years.