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.