82% of young Londoners worry they will never own a home
- Credit: PA Wire/Press Association Images
Young Londoners are giving up the dream of owning their own home, with high house prices, large deposits and low incomes seen as strong barriers to getting on the property ladder.
The capital has the lowest proportion of homeowners aged 20-45 in the country at 39 per cent, while 82 per cent of young Londoners who are not already on the property ladder worry they will never own a home, according to a report.
Across the UK, the proportion of people aged between 20 and 45 who are saving for a deposit to buy their own home has fallen by six percentage points compared with a year ago, to 43 per cent, according to the Generation Rent report from Halifax.
The report said this fall “strengthens the view” that more people may be giving up on the idea of owning their own home and are instead accepting the idea of long-term renting.
In London high property prices are considered to be the biggest barrier to home ownership by 68 per cent of respondents compared to 56 per cent nationally.
Nearly all Londoners are prepared to compromise when buying their own property with 95 per cent saying that they would be willing to do so, compared to 84 per cent in Wales.
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Craig McKinlay, mortgages director at Halifax, said: “Getting on the housing ladder has always involved some form of compromise, whether this is how much people put aside to save for a deposit, the type of home they buy, or even the location they buy their home in. In 2015 saving for a deposit is the biggest barrier to homeownership for people across the UK.
“Continuing to make compromises on things like outside space and the size of the property will all help when trying to buy a first home.”
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The report gathered information from more than 40,000 20 to 45-year-olds and 4,000 parents with children aged between 20 and 45.
Commenting on the report, housing and homelessness charity Shelter’s director of communications, policy and campaigns Roger Harding said politicians needed to act to address the crisis.
He said: “For the first time in decades, young people today are facing worse prospects than their parents because successive governments have ducked the question of how to fix the housing shortage.
“House prices have now shot up to ten times the average wage, leaving ‘generation rent’ left with two alternatives - either carry on living with mum and dad, or pay out dead money to landlords.
“And with prices still on the rise, it’s no surprise so many young people feel their dreams of owning a home are slipping out of reach. The only way to give generation rent any real hope of a home of their own is for politicians to deliver a big and bold plan that will finally deliver the affordable homes we desperately need.”
People who do not own their own home said they would be willing to save for about five years and four months to save for a deposit, while people who are already on the property ladder would be prepared to save for around three years and seven months.
The average amount that non-homeowners can afford to save each week is now £33.35.
Schemes such as Help to Buy have enabled people to get on or move up the property ladder with a low deposit, but while 53 per cent of people said they believe the scheme has had a positive impact, 8 per cent think it has had a negative impact and 39 per cent do not know or are undecided.
Some 79 per cent of 20 to 45-year-olds surveyed thought banks do not want to lend to first-time buyers.
Figures recently released by the Council of Mortgage Lenders showed the number of first-time buyers getting on the property ladder last year reached its highest levels since 2007. More than 300,000 people took their first step on the property ladder in 2014.
But Craig McKinlay, mortgages director at Halifax, said: “While there has been an increase in first-time buyers in the last 12 months, at the same time there is also a growing group of young people who believe they won’t be able to get a mortgage.
“The difference between the reality and their perception needs to be addressed urgently if we are to prevent people from giving up on getting on the housing ladder.”
Is enough being done to help first time buyers in London? Share your thoughts and tell us about your experiences at @HamHighProperty on Twitter