Demand is greater than supply, so house prices have rocketed.
This has in turn priced young first-time buyers out of the market. Therefore, the answer is more affordable housing, and quickly.
But is it?
One of the reasons property prices have exploded in the past decade is thanks to investment – particularly in London and particularly by foreign investors – into the UK property market.
This pushed prices up so high that people who actually want to live in these homes cannot afford to buy them.
And, while recent government subsidies – such as Help to Buy and the freeze on stamp duty – and the increasingly important role played by parental deposits have helped younger people get onto the property ladder, they have also contributed to the rise in house prices.
Access and affordability problem
The government’s target is to build 300,000 new homes every year, but recent estimates suggest there are as many as 600,000 vacant properties in the UK.
When you look at it like that, it is not a lack of homes that is the problem, it’s access and affordability.
The key to getting more first-time buyers onto the property ladder is not necessarily to build more affordable houses but to make the ones that already exist more affordable.
How can we do this?
Tighten international investor rules
One way would be to tighten the rules around foreign investors and buy-to-let investors.
The government has already gone some way into doing his by announcing in the Budget in October that foreign property buyers will be charged extra stamp duty on top of the existing stamp duty surcharge on second homes and buy-to-let purchases.
We are yet to see what impact this will have.
But if property prices do fall, there will be winners – first-time buyers – but also losers.
Pensioners, many of whom are property rich and cash poor and relying on their home’s value to fund their retirement.
In which case, the government needs to look more carefully at pensions. But that is a debate for another time.