Over eight million expect to never own their own home
Four in every 10 renters (40 per cent) expect to be renting forever, according to the latest Post Office Money Mortgages report.
The struggle to get on the property ladder has led 8.5 million UK renters to assume they will never be able to afford their own home. A further 2.5 million have said they don’t ever want to buy a property.
But it isn’t all bad news for first time buyers, as the average age that prospective homebuyers expect to get their first foot on the property ladder has decreased steadily since 2013 from 38 to 34 years old this year and the number of renters who say they will never be able to afford their own home has decreased from 45 per cent in 2015 to 40 per cent this year.
Those in the South West are the least optimistic, with renters expecting to be 37 when they buy their first home.
Recent news that the Help to Buy ISA cannot be used for the initial deposit on a new home will be a blow for the third (30 per cent) of renters who say struggling to afford a deposit is the main reason they do not already own a home, particularly as a quarter (24 per cent) are relying on the Help to Buy scheme to help with this. For 16 per cent of renters, monthly mortgage repayments are the main barrier to homeownership.
Prospective homeowners believe that it will take them eight years to save enough money for a deposit, with seven million renters (33 per cent) expecting to be saving for more than a decade.
John Willcock, Head of Mortgages at Post Office Money, said: “The struggle that first time buyers face remains a huge concern and confidence among the group is low. High house prices and concerns about the cost of living have left many assuming that owning their own property is a distant dream rather than an achievable goal.
“The news that the Help to Buy ISA cannot be used for an initial deposit will be a huge blow for savers and will push the goal of homeownership further out of reach. We hope Government initiatives like the Lifetime ISA will offer more of a helping hand to struggling savers.”
Only a third (29 per cent) of prospective buyers expect to save the full deposit amount on their own, with 23 per cent relying on help from their partner and 17 per cent depending on money from an inheritance. One in 10 (12 per cent) will look to make a withdrawal from the ‘bank of mum and dad’ to assist with their purchase.
Of those who don’t currently own their own home, nearly half (48 per cent) would be encouraged to buy in the near future if house prices were lower. A quarter (26 per cent) of prospective buyers are calling for more Government assistance, with a further 16 per cent wishing for the re-introduction of no stamp duty for first time buyers to encourage them to buy. One in 20 (seven per cent) cited the market uncertainty following the Brexit vote in June as a big concern as they consider a home purchase.
John Willcock continued: “More needs to be done to boost the confidence of first time buyers and help them reach their goal of homeownership. Hopefully the recent interest rate cut will be reassuring for those looking for their first home.
“Post Office Money has a range of mortgage products suited to the diverse needs of the UK’s potential buyers and provides expert support to help ease customers through the process.”