4 million people in UK believe they will never own home

According to a Government-sponsored report, for the new National Housing and Planning Advice Unit (NHPAU), four million people in England believe they will never own their own home because of soaring property prices and this number is likely to rise.

The news comes ahead of today's interest rate announcement, with some economists predicting the Bank of England may again hike rates, to 5.75 per cent.

The NHPAU, which has been set up by the Government to tackle housing affordability, said that average house prices will climb to ten times average earnings by 2026, compared with seven times annual earnings in 2006.

In 2000, houses were worth just four times annual earnings. "Demand for housing is growing and unless action is taken, pressure on the market will only get worse," said Professor Stephen Nickell, chair of the NHPAU in the telegraph."There is a clear need for more ambitious and urgent delivery if we are to make homes more affordable for our children."

Even if regional plans to build 190,000 new homes a year are met the housing crisis is likely to deepen, Professor Nickell said.

In 2006, 57 per cent of adults aged between 30 and 34 could afford to enter the housing market, but this is likely to fall to just 40 per cent of 30-34 year olds in 2026.

His organisation surveyed 2,722 adults in England, and found that 35 per cent of non-homeowners think they will never be in a position to buy a home, while an additional 18 per cent say it will be five years or more before they can purchase a property.