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One in five young Brits have abandoned the ideal of owning a home thanks to the ongoing difficulties in the mortgage market. That’s the findings of a new survey by mortgage lender Halifax which believes the problems facing first time buyers will have wider ramifications for society and the employment market over the next few years.
Almost three quarters of young people believe that the country is divided socially and economically between people who can and cannot buy a home. This comes after new figures found that the average asking price of a property in the UK now exceeds a quarter of a million pounds. We look at the problems facing first time buyers and young people in the large mortgage market.
The Halifax questioned 8,051 people aged between 25 and 40 and found that a fifth of people had given up on the ambition of owning their own home. In addition, more than 70 percent said the country is divided socially and economically between people who could and could not buy a property.
Just over a third of respondents (around 36 percent) were of the opinion that they would like to buy a home but they do not think they would ever be able to do so.
“Home ownership is clearly still an important goal for a lot of people, but fewer and fewer people consider it to be something they’ll be able to achieve,” said Halifax’s Mortgages Director, Craig McKinlay.
“Renters say they never feel properly settled and fear they will struggle to retire, so the social impact of this shift is significant. More needs to be done to redress the balance, both through making homeownership more accessible and offering more stability through the rental sector.”
The Halifax survey also found that the number of Brits choosing to live in rented accommodation has reached 22 million households – the highest level since the 1990s.
And, young people in Britain are also unconvinced by government plans to help home buyers. Around seven in ten respondents said that they didn’t believe that schemes such as the Funding for Lending initiative and the Chancellor’s new mortgage guarantee plan would help them. The International Business Times reports that ‘critics say the schemes are driving property prices higher and higher.’
“There’s certainly some evidence that the government’s intervention is pushing up house prices which, for many, is making it more difficult to buy,” says Islay Robinson, CEO of London mortgage adviser Enness Private Clients.
“Many young people can’t afford to pay a large mortgage, especially now that most lenders will insist on repayment terms. We’ve helped a number of professional clients who have access to a reasonable deposit and whose future earnings will support a high value mortgage but for the average first time buyer times remain very tough,” he adds.
This sentiment is backed up by new figure from the leading property website, Rightmove. They have recently reported that the average home asking price in the UK exceeded a quarter of a million pounds for the first time in June, making it more difficult for prospective buyers to own houses.
For more information on accessing the mortgage market as a first time buyer, feel free to contact one of our expert brokers for a personal consultation and professional guidance, alternatively you can read our latest mortgage process guide for assistance.