A striking 82% of 20-45-year-olds living in London has given up on buying a home, according to the latest Generation Report from Halifax.
The report – which interviewed 40,000 people under 45 from across the UK and is the largest of its kind – reveals the devastating impact that rising house prices have had on the psyche of would-be first-time buyers, especially those living in London.
It’s the fifth consecutive report of its kind from Halifax (which remains the UK’s largest lender to first-time buyers), and reveals how little the government’s flagship Help to Buy scheme has done to change the perceptions of buying a home for many young people.
“The latest official figures reveal that [the] Help to Buy scheme has helped 88,420 people buy a new home since its introduction in 2013,” says the report in its introduction.
“And, in March 2015, there were 195 95% loan to value mortgages available from UK lenders, the highest seen since May 2008. However, the Report shows relatively little improvement in how potential first-time buyers perceive their chances of getting on the housing ladder.”
While London fares the worst when it comes to fears of home ownership, the rest of the UK paints a grim picture too. Interestingly, the most optimistic are those living in the North West, with just 71% fearing they’ll never get on to the property ladder.
The Halifax report puts this partly down to rents which remain notoriously high in London, thereby preventing young people from saving for a deposit – even after London wages are taken into account.
Commenting on the report, Craig McKinlay, mortgages director at Halifax, said: “While there has been an increase in first-time buyers in the last 12 months, at the same time there is also a growing group of young people who believe they won’t be able to get a mortgage. This difference between the reality and their perception needs to be addressed urgently if we are to prevent people from giving up on getting on the housing ladder.”
Meanwhile campaign groups such as Generation Rent and Priced Out continue to campaign for affordable rent in sustainable communities.
Duncan Stott, of campaign group, PricedOut said: “We are clearly witnessing the slow, painful death of homeownership. This survey shows that most 20 to 45 year olds don’t own their home, but only 16% say they don’t want to buy.
“Meanwhile the vast majority of non-owners are worried that they will never people to afford their own home. Without urgent action to get the housing market in a fit shape for people on ordinary wages, we will soon need to question whether Britain has any right to claim itself a property owning democracy.”
Key Statistics from Generation Rent 2015: Don’t stop believing
- 53% think the Help to Buy scheme has had a positive impact, but 39% don’t know or are undecided.
- The three most cited barriers to homeownership among those who do not own a property are the size of the deposit (57%), high property prices (56%), and low income (53%).
- London has the lowest proportion of homeowners aged 20-45 (39%) and the highest number of people in this age range who worry they will never own a home (82%).
- Non-homeowners are currently prepared to save for average of 5.35 years in order to save for a deposit whereas homeowners saved for an average of 3.6 years.
- The average amount that non-homeowners can afford to save each week is now £33.35.
- 39% of 20-45 year olds are saving to buy two-bed properties (split between flats and houses: 18% versus 22%)