A generation of young people has given up on owning their own homes, according to research that deals a further blow to the fragile housebuilding recovery.
Nearly half of 20 to 45 year olds say Britain is becoming more like Europe, where renting is seen as the norm, and predict Britain will become a nation of renters within the next generation.
The National Centre for Social Research report commissioned by Halifax quizzed 8,000 20-45 year olds in one of the most in-depth surveys of young people’s attitudes towards housing. It found that while 77 per cent of young people still aspired towards owning their own home, 64 per cent of non-homeowners believed they had no prospect whatsoever of buying one.
Fresh figures out today showed that planning permissions for new housing fell by 17 per cent in the first quarter of 2011 compared to the same period last year.
The perception that banks were not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented ‘generation rent’ from making any significant attempts to buy a home, according to the researchers.
Longer-term, only 5 per cent of this group were making sacrifices to save for a deposit.
The rest said they had no spare cash, no interest in saving for a deposit or were trying to save but failing to do so.
Halifax mortgages commercial director Stephen Noakes said: “Our research indicates just how many potential first-time buyers are not making it to the application stage because of a fear of being declined.
“We would like to help aspirational home buyers realise they do have options, that they can apply for a mortgage, and that it is still possible to get onto the property ladder.
“At Halifax we approve 8 out of ten mortgage applications from first-time buyers, and it is important that today’s potential first time buyers don’t miss out because of the fear of rejection.”
The report revealed widespread pessimism about lenders and the mortgage application process:
- 84 per cent said first time buyers were put off by a belief that banks do not want to lend to them and find excuses to turn them down
- 92 per cent saw it as hard for first-time buyers to get a mortgage, with 60 per cent seeing it as very hard or virtually impossible
- 67 per cent believed there was a general perception that everyone was rejected by lenders so there was little point in applying
- 61per cent said first-time buyers did not want to go through the stress and anxiety of applying for a mortgage