Both house prices and rents are set to rocket over the next ten years, while buying a house is already getting further out of reach for many.
In an astonishingly strong joint statement released today, ARLA and the NAEA are forecasting that home ownership will fall by 7% by the year 2025, while the renting population rises by 9%.
ARLA says rents will rise by over a quarter, while the NAEA predicts house prices will soar by 50%.
The sibling organisations say that a “drastic and immediate” overhaul is necessary to fix Britain’s broken housing market.
Today’s report, compiled with the Centre for Economics and Business Research, not only predicts the state of the property market in ten years’ time but suggests what can be done to repair it.
With the average house price currently around £280,000, the NAEA and ARLA Housing 2025 report predicts an average price of £419,000 in ten years’ time.
In London, prices are expected to nearly double in the next decade, rising from £515,000 to £931,000.
Rents are predicted to increase by 27% from a current UK average of £134 per week to £171 in 2025.
Again, those living in London will be worse off as they will need to pay 34% extra in rent per week by 2025, an increase from the current average of £234, up to £314.
The report says that the current level of home ownership in the working population of around 62% will fall to 55%, while households in rented accommodation will rise from 20% to nearly 29% by 2025.
David Cox, ARLA managing director, said: “Buying and renting a home is a giant step, and is out of reach for many.
“Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade.”
Mark Hayward, NAEA managing director, said: “House prices are only going to go one way, and unfortunately that is up.
“For so many already priced out of the market, this is news aspiring house buyers will not want to hear.”
The organisations, which come under the NFoPP umbrella, call for a number of measures.
These include: building on parts of the Green Belt; mandatory licensing of landlords and letting agents; encouraging institutional investment into the private rented sector; encouraging more bricklayers and other construction workers from outside the EU to work in Britain; and a Stamp Duty Land Tax exemption for pensioners looking to downsize.
Cox and Hayward said: “The housing crisis Britain is facing is deep-rooted, and if it is to be solved will require finance, suitable land, time, new skills and most importantly, the appropriate national regulation of the key stakeholders, not least the estate agents and letting agents that form our membership.
“We are calling for change – and it needs to happen soon.”
