Recent CML research shows the percentage of the adult population aspiring to own a home is nearing its lowest level in the last 30 years. Despite this, at 79%, it remains the aspiration of the vast majority.
18 – 25 year olds have shown the largest change in sentiment, with a reduction of 10% aspiring to home ownership since 2007 and 3% in the last year. This is a concern for the housing market, as it is first time buyers who provide the stimulus for others to move up the housing ladder.
44% of those surveyed said they would ideally like to buy a home in the next 2-3 years and the groups with the greatest desire to do this are those living with friends or relatives, those currently in private rented accommodation and the 25 to 34 year old group. Of these, however, only 36% think they are likely to be able to buy, just 16% of the total. The major factors cited as standing in the way of home ownership were savings available for a deposit, house prices being too expensive and the high costs associated with property purchase. Receiving an inheritance, windfall or pay rise was seen as a remedy to this as was a reduction in house prices and stamp duty.
The research showed there was significant support for the government to provide some assistance to make it easier for people without a large deposit to get a mortgage. 59% thought this should be a policy goal for the government and 60% felt it was unfair that borrowers who are only able to put down a small deposit have to pay a higher mortgage rate.
The government’s newly announced schemes in the recent budget, Help to Buy, and the mortgage guarantee scheme to enable higher loan to value lending, should help address these concerns and make the dream of home ownership more widely available. London & Country has a useful calculator to help would be borrowers get a better understanding of what they may be able to borrow to start the journey towards home ownership.