This view is also held widely among the general population, with almost half (48%) of this year’s respondents agreeing that Britain will become a nation of renters within the next generation, and 46% agreeing that Britain is set to become more like Europe, where renting is a more common way of life.
The older generation are also aware of this change in attitude, with 41% of 35 and overs agreeing that home ownership is less important in life than it was a generation ago.
Attitudes have also softened in other areas, as conflict between the rental and family home seems to have reduced, with the proportion of non-owners who don’t want to raise children in a rental property falling to 40%. Additionally, renting has come to be seen as more of a lifestyle option, with the number of respondents worried about renting having a negative impact on their retirement dropping from 57% to 51%.
The market factors which have further raised barriers to those desiring to enter the housing market include the fact that the average deposit for first-time buyers in the UK has risen from £28,001 to £30,943 and, although this remains stable as a proportion of the house price at around 20%, this is 10% higher than in the boom year of 2007.
This surge in the value of deposits has resulted in first-time buyers having to undertake an increasing number of hardships before buying their first homes; evidence of which is recorded in the Halifax report, with reduction in spending no longer being enough to save sufficient funds.
Young professionals now have to take more drastic measures; moving back into the family home, borrowing money from friends or visiting the increasingly renowned ‘bank of mum and dad’, all of which have now become essential requirements for those buying that all-important first home.
Younger potential homeowners are now spending a longer period of time residing in the family home in order to save funds ahead of their purchase, with the report finding that this generation is far more likely than the preceding one to live with their parents for longer (31% v 15%)
Additionally, six out of ten 20-45 year-olds now agree that support from family members is required to help first-time buyers in acquiring a new property; of those who have succeeded in this, only 37% of young homeowners received no help from their parents when purchasing their home.
The introduction of The Help-to-buy scheme which has recently been extended until 2020, has had a considerable effect in reversing this trend, with over 17,000 homes having been bought under the scheme in its first nine months, 88% of which were purchased by first-time buyers.
The LSL first-time buyers’ barometer documents the positive effects of the scheme in improving accessibility to the market. The report, carried out in January, found that only 10% of respondents believed they would never be able to afford to buy, lower than those surveyed in December (12%) and far lower than in December 2012, when 20% of tenants ruled out any hopes of purchasing a property.
The report, which surveyed tenants registered with Your Move and Reeds Rains, also showed that as a result of the scheme 20% of tenants now expect to buy within the next year and a further half (48%) believe they will be able to buy within the next five years.
The Halifax report claims that there is still a drastic housing shortfall and estimates that 232,000 new homes need to be built each year to meet demand from investors interested in acquiring buy-to-let properties and demand from first-time buyers hoping to take advantage of the help-to-buy scheme.
As the leading lender to first-time buyers, the annual Halifax ‘Generation Rent Report’ is essential on informing the latest trends and this year’s report is the fourth annual report, containing data from interviews with over 32,000, 20-45 year olds.