HOUSE prices and rents will rise higher in the East of England than the rest of the country as the market goes into crisis.
That is the gloomy prediction of the National Housing Federation which says an entire generation is being locked out of the housing market.
The federation said on Tuesday that home ownership in the East of England will drop from 71.9 per cent in 2010 to 64.2 per cent by 2021 and house prices will rise more than anywhere in the country in the next five years.
It says the average house price in the East of England will rise by 25.6 per cent over the next five years, while the average house price in England will rise by 21.3 per cent.
The federation, which represents housing associations, warned a chronic under-supply of homes will fuel steep rises in the private rental sector, huge social housing waiting lists, and a house price boom.
James Bedford, a partner in Bury estate agents Bedfords, said: “Supply is not meeting demand. It’s not that they’re not selling, it’s that they’re not coming to the market.
“There is certainly a need for lower priced homes for first time buyers and banks need to lend more. You can be renting a property and they won’t let you pay the same in a mortgage.”
Managing director of Nowton-based Bennett Homes Edward Parker said: “The British have always liked owning their own homes and if there is a fall in current levels, this is largely down to the lack of mortgage availability but particularly for first time buyers.
“Factors affecting companies like ours increasing the level of build include the shortage of good quality land, reluctance from the banking sector to finance property development and the time-consuming and bureaucratic planning system.”
Philip Sullivan, deputy chief executive of Havebury Housing, said: “One of the key points highlighted by the report is the huge unmet demand for affordable accommodation, particularly in the social rented sector. Housing associations play a vital role in helping to meet this need and in the last two years Havebury Housing Partnership has developed 200 properties for rent across Suffolk. Going forward we plan to build more. This underlines our commitment to play a part in helping meet the housing needs across the communities where we operate.”