By Daniel Hunter
Young people remain pessimistic about their chances of getting on the property ladder, with only a third prepared to save for a deposit for more than three years before abandoning their plans, according to the third annual Generation Rent report from Halifax.
With the average deposit paid by first-time buyers in the first quarter of the year at £26,956, the latest report reveals the ongoing struggle to take the first step onto the property ladder.
However, the report finds the issues currently facing those looking to get onto the property ladder are such that there is a danger of splitting the UK in two: between those who can and cannot afford to buy a home.
“We are seeing a change in the social landscape of the UK, with a widening split between those who can and cannot afford to buy a home," Craig McKinlay, Mortgages Director at Halifax said.
"Homeownership 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.
"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.”
Key highlights from the report include:
- 71% of 20-45 year olds anticipate that country is in danger of being divided by social and economic differences between homeowners and non-homeowners.
- Over half (52%) predict Britain will become a nation of renters within the next generation.
- One in three (31%) are only prepared to save for three years to build up the deposit on their first home.
- A fifth (21%) of non-homeowners aged 20-45 have already given up on the prospect of owning a property — this rises to 43% among 40-45 year olds.
- 57% of non-homeowners are concerned they will be unable to retire if they have to rent all their life. A similar proportion believe people can never feel fully settled in rented property.
- 47% think it is important for parents to bring up children in a home that they own, not rent.
- The Bank of Mum and Dad remain heavily burdened; with nearly a third (30%) concerned the support they have provided may affect their own financial future.
- 29% of 20-45 year olds who don’t own their home and have no plans to get on the property ladder.
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