The results of a survey released today points to the fact that many potential first time buyers are giving up on their chances of buying a home and are resigned to having to rent. Halifax suggests that if these attitudes become reality Britain faces a fundamental change in the shape of its housing market within a generation.
The research polled the opinions of 8000 20 to 45 year olds and whilst 77% of non-homeowners expressed a desire to own their own home, 64% felt that they had no prospect of actually buying, being dubbed Generation Rent.
The reasons behind this lack of optimism revolved predominantly around the availability of mortgages. The majority placed the size of deposit as the single biggest hurdle to buying whilst others pinpointed the belief that lenders do not want to lend, that it’s very hard for first time buyers to get a mortgage and a perception that everyone’s application is rejected by lenders.
These are extreme views but reflect the gloomy outlook that potential first time buyers have of their prospects of taking the first step onto the ladder. Certainly there remains a need for larger deposits although, on a slightly brighter note, there are encouraging signs of more lenders offering rates at higher loan to value.
The improvement is likely to be gradual and it remains a tough market for first time buyers but the more lenders that improve their mortgage rates, the more competition it will create. This in turn should help improve the available options but in the meantime the name of the game is saving for a deposit.