Owning a home could be put further out of reach for many Britons as the Bank of England has warned the housing marketing is unlikely to recover from the financial crisis.
Bank of England Monetary Policy Committee member David Miles said there is a possibility that house prices will not return to the pre-recession levels a banks are more reluctant to provide loans, according to The Telegraph.
He added that people may have to wait until they are in their 40s to get a sufficient loan to buy a property, although he said he did not ‘think we should regret’ the changes to the housing market caused by the crisis.
‘Housing markets and mortgage markets have been close to the centre of the economic and financial turmoil we have lived through over the past four years,’ said Miles, who headed up an official inquiry into the mortgage market.
‘I do not believe that the housing market and the mortgage market will get back to where we were in the years leading up to the crisis. I also do not think we should regret that.’
He added: ‘It will take time for first-time buyers to accumulate larger deposits, so they will typically buy later and the share of home ownership will be lower. But in the longer run it is not at all clear that a lower rate of home ownership represents a big loss to society.’
Earlier this week Prime Minister David Cameron announced plans for the government to underwrite part of home loans to first-time buyers in an attempt to make home ownership more affordable.