Nine million renters believe they will never own their own home
There are 20 million people currently renting a property in the UK, according to new data from the Post Office Money Mortgage survey. 45% of these don’t expect to get onto the property ladder in the foreseeable future.
The average age that people expect to be able to climb onto the property ladder is now 36 years old; which has risen from 35 last year. This suggests that increasing house prices and the slow growth in the economy remain a challenge for first-time buyers. The expectation that they won’t own a home until they are in their mid-thirties is shared across most renters. Those in the East Midlands are the most doubtful, believing they will be 46 before being in a position to purchase.
The survey shows that saving for a deposit is perceived as the biggest challenge to getting a foot on the property ladder. Would-be buyers fear, on average, that it will take them over 8 years to raise enough money for a deposit, with ten per cent expecting to wait for more than a decade. This has, however, decreased from 10 years in 2012, so there may be a silver lining in that those who do see themselves buying a property predict it happening somewhat quicker than in previous years.
However, one in four potential home buyers (28%), believe they will never be able to afford a deposit unless their circumstances change dramatically, be it through a better paid job or cash windfall. Being unable to afford mortgage repayments is also another big concern.
31% of those looking to buy a property plan to save the full amount for the deposit themselves. Some 25% of renters intend to take advantage of the government’s ‘Help-to-Buy’ scheme while others will rely on help from their family members or partners.
Main reasons for not owning a home
- 28% – Unable afford the deposit unless circumstances change
- 17% – Can’t afford mortgage repayments
- 12% – Don’t want to own a home
- 11% – Currently saving for a deposit
- 8% – Prefer the freedom of being able to move when they want
46% of prospective buyers say they would be more likely to buy if house prices were to fall, though this may still be a long way off as prices are still increasing; with a 5.7 per cent increase in the first half of the year.
For the meantime, 26% of renters believe more support for first-time buyers from the Government would be a huge help. Lower interest rates would allow 24% of would-be owners to buy sooner, whereas the re-instatement of ‘no stamp duty for first time buyers’ would encourage 14% to take the plunge.
Reaching important milestones in life, such as getting married or starting a family are also triggers for first time buyers to reach for the property ladder.
However, many renters (more than two million people) simply enjoy the freedom of renting and claim they have no desire to purchase.
Across the country, potential buyers in the West Midlands and the South East see buying a home as a real challenge with 51% and 59% respectively predicting they will never be able to afford it.
Meanwhile, 37% of renters in the East of England and South West expect they will be renting for life.
Post courtesy of Property Reporter.