Delays in getting on the housing ladder will cost the average first-time buyer more than & pound;270,000 over their lifetime.
Those who never buy will cost taxpayers dearly, because they will drive up housing benefits and long-term care costs to & ldquo;truly unsustainable levels & rdquo;.
The forecasts are from Brian Hall, a housing market analyst whose company, The Model Works, has been looking at the growth of the rental market at the expense of the first-time buyer with growing concern.
Back in the 1960s the average age of the first-time buyer was 24. Today, according to Moneysupermarket, it is 37.
Based on market data averaged over 30 years, The Model Works has calculated that the returns from investing all the savings from buying a home at 24 as opposed to 37 could over a lifetime amount to more than & pound;270,000 at today & rsquo;s value (the calculation assumes a tax efficient savings scheme).
Hall said: & ldquo;That first-time buyers are getting older is a well-established fact.
& ldquo;But we believe this is the first time that the full cost to those affected has been quantified, and of course millions are affected. & rdquo;
He points out that mortgage repayments are pegged to the original purchase price, while rents rise over time, and so the savings from home buying increase year on year. & nbsp;
Buying at 24 also reduces the term spent renting by 13 years, compared with at 37. & nbsp; Finally, tax breaks and compound interest over a longer period contribute significantly to the total.
The worse-case scenario is to be excluded from home ownership for life, renting in the private rental sector, with rents continuing to rise for decades after the mortgage would have been repaid, meaning that tenants find it difficult to save and are therefore unable to accumulate equity.
A further danger, Hall warns, is posed by auto enrolment in a workplace pension scheme.
He says this will further erode disposable incomes, and to this new expense must be added rising rents and student loan repayments, making it even more difficult to save a deposit. & nbsp;
However, opting out will result in a loss of employer & rsquo;s contributions. & nbsp;
The Model Works previously linked growth in the private rental sector with rising demand for housing benefits, and now research by Partnership has found that almost half of home owners expect to sell or let out their property to pay for their long-term care. & nbsp;Tenants do not have this option and may require comparable support from the State, says Hall.
He said: & ldquo;If current trends continue, the total cost of delayed home ownership and exclusion for life could cost the taxpayer tens of billions of pounds per annum, and these costs will rise as the retired population is expected to double by 2050.
He warns that taxpayers are already providing & ldquo;staggering levels of support & rdquo; to non-home owners and says the problem can only worsen unless dealt with properly.
& ldquo;Somewhere in all the data and opinion is a simple cost, risk and payback model, & rdquo; said Hall.
& ldquo;Faced with the facts, it becomes crystal clear that doing nothing is not an option. & rdquo;
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