Britain may become a "nation of renters" within a generation, says a study by one of the UK's largest mortgage lending companies.
Halifax and the National Centre for Social Research surveyed 8,000 prospective first-time home buyers between the ages of 20 and 45. The findings include the following:
- Almost 50% believed that Britain is becoming more like the rest of Europe, where renting homes is the norm.
- Only 5% of the respondents are saving up towards their first home. The other 95% are either choosing not to save, or are trying but failing to save, for their first home.
- Two-thirds believe they have no prospect of owning a home in the next five years, the stress of applying for a mortgage and the fear of rejection being one the reasons they are not inclined to attempt it.
- 84% believe that banks will not lend to them as first-time buyers.
- Despite this, more than 75% still aspire to own a home one day.
Halifax concludes that if "Generation Rent" comes to pass, it would have major consequences for Britain's economy and living standards. Construction would slow down and the housing market could come to "a standstill," says the report, "as many people living in their first homes would not be able to move up the ladder without a first-time buyer purchasing their home."
According to Findaproperty.com, first-time buyers with no financial assistance from their parents will rent for an average of 31 years (from the age of 21) before buying their first home. In England overall, the average number of years renting before buying a home is 16, so the average age of an unassisted first-time home buyer is now 37. In a few years this could go up to 43. The size of the deposit required to buy a first home is now 21%, or an average of £28,770. London, which has the highest property prices in the country, is the hardest place for first-time home buyers to buy in.