Raising a deposit is the biggest barrier to the housing ladder for many young people many of whom are ‘highly pessimistic’ about their prospects of homeownership.
A report published today by the Building Societies Association (BSA) has revealed 70% of young people think the struggles they face buying their first home is one of the biggest problems we have in Britain today.
This gloomy outlook from people in the 25 to 34 age group comes despite almost half those who aren’t yet homeowners admitting they want their own property in the next ten years.
Yet 41% think this dream is unlikely because of problems raising the deposit, difficulty accessing a mortgage and affordability of mortgage payments amongst many other obstacles.
Statistics back this up revealing a significant fall in the last ten years in the proportion of this age group who own their own home, tumbling from 40% in 2008 to 33%.
Unlocking housing wealth
The BSA recently commissioned a project to investigate intergenerational lending in a bid to unlock some of the housing wealth of baby boomers.
Paul Broadhead, head of mortgage and housing policy at the BSA said: “It is stark and worrying how gloomy many young people are about their chances of future home ownership.
“With the average age of a first-time buyer standing at 33, this is the very group most likely to be considering buying. If they are right and their chances in 10 years’ time are still bad the societal divide and economic impact already felt can only grow.”
He added: “Without a massive push to build more homes to overcome the deficit of decades it is hard to see that things will improve. Mortgage lenders also have a part to play to break down the barriers.”
Kevin Roberts, director of Legal & General Mortgage Club, said schemes such as Help to Buy and Shared Ownership played an ‘invaluable role’ in helping first-time buyers but these alone were not enough to fix the housing crisis.
He added: “We need the Government to really commit to a long-term plan if we are to see the target 300,000 new homes built every year, but there’s also a part for industry to play to develop innovative, intergenerational solutions that can give us all an equal chance and not just the lucky few.”
Primary issues faced by 25 to 34 year olds
- 76% – Raising a deposit
- 46% – Access to a large enough or any mortgage
- 43% – Affordability of mortgage payments
- 29% – Job security
- 18% – Concern that property prices may fall in the future
- 15% – Stamp Duty costs
- 12% – Finding the right property
- 11% – The complexity of the home buying process
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I think that its incumbent upon us baby boomers to become the bank of mum and dad, we have used equity release to fund homes for our two children, they would get the money eventually, but it’s nice for us to see them benefit whilst we’re still here.
They have benefitted from us deciding to only having two children ,