Most British to become renters as house prices rise
Half of people think Britain will become a nation of renters within a generation as young people give up on the dream of home ownership, as house prices are expected to rise further.
Around 77% of people who have not yet got on to the property ladder said they still aspired to buying their own home, but 64% said they thought they had no prospect of ever doing so, according to a survey by high street bank Halifax.
Instead, 46% of 20 to 45-year-olds said they thought the country was becoming more like Europe, where renting is seen as the norm, and Britain would be a nation of renters within a generation.
The perception that banks are not lending was seen as one of the biggest problems, with 84% of potential first-time buyers saying banks did not want to advance them money and would find excuses to turn them down.
At the same time, 92% of the 8,000 survey respondents said they thought it was hard for first-time buyers to get a mortgage, 60% of whom thought it was either very hard or virtually impossible.
The large deposits currently required were seen as a further barrier, with only 5% of people saying they were making sacrifices to save for a deposit, while 95% said they either did not have enough spare cash to do so, were not interested in setting aside money or had tried to do so but failed.
A further 61% of potential buyers also said they were put off getting on to the property ladder by the stress and anxiety involved in applying for a mortgage.
Alison Blackwell, of the National Centre for Social Research, which compiled the report for Halifax, said: “The phenomenon of Generation Rent could have major socio-economic implications.
“It would mean fewer homeowners being able to buy and therefore fund the construction of the new homes required in the UK to meet demand, resulting in a slowing-down in the housing market.
“It could open up a widening of the wealth gap that already exists between homeowners and non homeowners. And people in Generation Rent risk insufficient finances at retirement.”
Halifax said it planned to launch a first-time buyer pledge in July in response to the problems people faced getting on to the housing ladder.
This will involve it publishing a detailed overview of its lending criteria, as well as a personalised promise on how much it will advance people, without it leaving a lasting record on their credit file.
If an application is rejected, it will give customers information on why this happened and it will provide them with a plan on how to move forward regardless of whether they are successful or unsuccessful with their application.
Source: Sky News