The research conducted by CEBR forecast that by 2025 the typical three-bedroom semi will be a rarity with housing stock split between smaller, more compact dwellings for first-time buyers and a return to the Victorian era where generations of families buy together for more space.
It found that increasing levels of divorce and separation mean the trend towards single person households will grow by 2025. Alongside this, it said initiatives such as the government’s ‘Homes for All’ policy will result in homes being smaller and built closer together, with gardens, garages and conservatories all being sacrificed.
It added that an increase in smaller starter homes will mean the share of homes available to first-time buyers should increase. Woolwich predicted that this effect could increase the share of homes available to first-time buyers to 52.3 per cent of homes in 2025 – an increase of 1.7 per cent from the situation today.
The average house price is set to rise to £333,000 from the current price
of £156,530.
Andy Gray, head of mortgages at Woolwich, explained that increased availability and affordability of houses mean things are looking up for first-time buyers but that it will come at a price.
He said: “At the other end of the scale, we expect to see generations of families moving into larger properties together in order to maximise space. This may have added benefits in terms of childcare and nursing costs for elderly relatives.”
Jim Buckle, managing director of propertyfinder, said: “As our research and that of the Woolwich showed, the number of one and two-bedroom starter homes has grown enormously over recent years and this growth seems likely to continue, but there is a shortage of three and four-bedroom family homes.”
