Two in five (43%) consumers who currently rent or live at home expect that they will never buy their own property, according to a new report from Halifax.
The research, conducted in partnership with YouGov, also found that of those currently renting, around three in 10 (29%) think it is now normal for people to do so for life. That trend shifts with age though, as only 14% of 18-24 years old view renting for life as normal, compared to a third (32%) of 35 to 44 year olds. Youngers generation appear to be more optimistic generally, with more than half (57%) of 18-24 years old believing they will one day buy a property. This falls to just 28% amongst 35 to 44 year olds.
Despite this pessimistic view of home ownership, over the last decade the number of first-time buyers in the UK has actually shot up, from 72,180 in the first half of 2009, to 170,060in the first half of 2019. The average age of a first-time buyer has risen slightly from 30 to 31 over the same period.
First-time buyers accounted for more than half (51%) of the UK’s mortgage market last year, the first time this has happened since 1995.
Amongst non-home owners who believe they will buy at some point in future, mortgage affordability is seen as a significant barrier by two thirds of people (66%), despite the current period of low interest rates and strong wage growth.
A similar proportion (64%) highlight that saving a deposit is a big challenge. Deposit amounts for a first home have risen on average by 52% over the past decade. The average deposit for those buying their first home is now £41,099 – just under a fifth (18%) of the average house price of £224,709. 10 years ago, the average first-time buyer paid just £138,413 for their property with a deposit of £27,059 (20%).
Of those who believe they will buy one day, a third (35%) say they plan to use the Help to Buy scheme to get on the housing ladder, while only one in 20 (6%) expect to buy through a shared ownership scheme.
Meanwhile, more than a quarter (28%) expect financial support from their family to purchase a property, with 23% planning to rely on future inheritance. Almost half (45%) expect they will only be able to buy with a partner.
More than a third of parents (35%) say they are happy to help their children with the cost of buying a home, while a quarter (25%) believe their children will never own a property.
The research also revealed the sacrifices that people are willing to make to become a homeowner. A third (35%) say they would give up living in the location where they ideally want to buy, and two in five (38%) would comprise by purchasing a smaller property. Meanwhile, more than a quarter (27%) said if they ever own a property it is unlikely to be their ideal home.
Russell Galley, Managing Director at Halifax said “Taking that first step onto the property ladder remains a rite of passage for many. The financial hurdle of saving enough for a deposit might feel like a daunting or at times near-impossible task, but there are a number of options out there, including government schemes and family support mortgages, to help put first-time buyers on the right track.
“Last year, first-time buyers accounted for the majority of the mortgage market for the first time in well over 20 years. This shows that with the right support and a few sacrifices, home ownership can remain an attainable goal.”