Britain is home to a generation of renters who are giving up on buying their own home, says a report out today.
If attitudes become reality, the shape of Britain’s housing market will be fundamentally changed within a generation.
According to the research into the attitudes and behaviour of young people towards home ownership, 77% of all those who do not own a home still aspire to owning one.
However, despite this aspiration, nearly half of 20 to 45-year-olds say Britain is becoming more like Europe where renting is seen as the norm, and predict that Britain will become a nation of renters within the next generation.
Produced by the National Centre for Social Research, the report analysed the results of a survey of 8,000 20 to 45-year-olds and identified the emergence of ‘Generation Rent’: two-thirds (64%) of non-home owners who believe they have no prospect whatsoever of buying a home.
The perception that banks are not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented ‘Generation Rent’ from making any significant attempts to buy a home.
Longer term, only 5% of this group are making sacrifices to save for a deposit; 95% say they have no spare cash, no interest in saving for a deposit, or were trying to save but failing to do so.
Stephen Noakes, commercial director of Halifax Mortgages, said: “Our research indicates just how many potential first-time buyers are not making it to the application stage because of a fear of being declined.
“We would like to help aspirational home buyers to realise they do have options, that they can apply for a mortgage, and that it is still possible to get on to the property ladder. At Halifax we approve eight out of ten mortgage applications from first-time buyers, and it is important that today’s potential first-time buyers don’t miss out because of the fear of rejection.”
The report revealed widespread pessimism about lenders and the mortgage application process: 84% say first-time buyers are put off by a belief that banks do not want to lend to them and find excuses to turn them down, and 60% believe getting a mortgage is very hard or virtually impossible.
Almost seven in ten (67%) believe that everyone is rejected by lenders so there is little point in applying.
Comments
The deposit issue has been overplayed in my view.
In the SE average FTB property is circa 190k as per DCLG - thus a 10% deposit could be saved in 15/18 months by a committed aspiring buyer, who earns enough to service the 90% loan and bills.
Since servicing the residual 170k loan at 6%, plus associated bills mandates a net monthly income circa 1500, ie 23/25 k gross - being the median wage, it says that those on median wage can buy, but only if committed.
The article suggests 95% are not committed to saving - thus ignoring that everything in life has a price.
@Paul
In the main the market moves in chains as people move upwards. The sale of a new build does nothing to help this as nobody moves from a new build..
@Ray
I do not see how it could make it worse - please explain your thoughts.
I see this as moving PART of the market forward which can only be good. This may also have the added advantage of inspiring others to move into the market place who otherwise may have been hesitant.
Unless you know better.
so people are down beat at the moment, this is hardly surprising.
when the economy is in a better state i am sure the same survey would have very different results.
what a waste of time and money.
I note that today it is reported that the banks and builders are discussing providing 95% mortgages for FTB's and NEW builds (no details yet about conditions or rates). It is being hailed by the press as a 'break through' for the housing market. However good it is for FTB's (and the builders!) it will do nothing for the market as a whole and may indeed make it worse?