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Generation Rent giving up on homeownership dream

19 April 2015 / By: / Under: London Property News

The number of people aged between 20 and 45 who are saving for a deposit to buy their own home has fallen six percentage points to 43% compared with a year ago, according to the latest Generation Rent report from Halifax.

Of the 40,000 20 to 45-year-olds who have yet to buy a home surveyed by mortgage lender Halifax, 57% said the size of the deposit required was a barrier to home ownership, while 56% said high property prices were putting them off and 53% were worried about their low income.

And young Londoners are the most downbeat about their prospects of owning their first home. A total of 82% of worry they will never be able to buy a house, citing high prices as the biggest barrier to getting on the property ladder.

Despite sales to first-time buyers increasing by more than a fifth last year to 311,500 thanks to the improving UK economy and government schemes such as Help to Buy, 79% of 20 to 45-year-olds believe banks do not want to lend to first-time buyers, while 21 per cent think it is “virtually impossible” to obtain a mortgage.

Another barrier to home ownership identified by the Generation Rent survey is that first-time buyers are unwilling – or unable – to save more than £10,000 for a deposit, especially those in areas that have seem booming house prices. And those who are still saving take an average of five years and four months to put away the funds they need for a deposit.

Property shortage

But the biggest issue when it comes to housing is a shortage of property. The construction of new homes dwindled after the banking crash to levels not seen since the 1920s.

The recent launch of manifestos by the major political parties shows that the housing market is high on their agenda. The Conservative Party plans to extend the Right to Buy scheme for social housing tenants that was first unveiled by Margaret Thatcher, while Chancellor George Osborne has also pledged to increase the number of new properties built by relaxing planning laws and extending schemes such as Help to Buy.

The Labour Party says any new government needs to take direct action to boost supply and has pledged to introduce a £5bn future homes fund to build125,000 homes over the course of the next parliament. Labour leader Ed Miliband said the party plans to raise construction levels to 200,000 homes a year by 2020.

The Generation Rent survey strengthens the view that more and more people may be giving up on the dream of home ownership. This means that lower levels of home ownership may become the new normal and that long-term renting will be an option pursued by more and more people.

This puts landlords in a difficult position of having to provide high-quality housing for long-term tenants without having the guarantee that they will remain in the property.

But imagine a world with no voids, no late night telephone calls from tenants and no dealing with viewings or lettings. With Assetgrove’s Guaranteed Rent Scheme we take care of everything, and we provide landlords with a fixed guaranteed rental income for up to five years. So you can get on enjoying your life, leaving us to look after your property as if it were our own.

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