Would be first time buyers are losing hope of ever owning their own home, but Camden’s hopeful renters haven’t given up yet

What does it mean when even estate agents can't get on the property ladder?

What does it mean when even estate agents can't get on the property ladder? - Credit: Archant

New study finds that 250,000 people have given up on the dream of owning their own home in the last year. Local estate agents haven’t seen any evidence of this on the ground, but even they can no longer afford to buy in north London

A study by the HomeOwners Alliance has revealed that 253,166 people gave up on the dream of owning t

A study by the HomeOwners Alliance has revealed that 253,166 people gave up on the dream of owning their own home in the last year - Credit: Getty Images/iStockphoto

For the first time in five years the number of people aspiring to own their own home has dropped. 250,000 people who do not own their own home have this year given up the dream of homeownership altogether according to the HomeOwners Alliance 2017 Homeowners Survey.

The study looked at the major concerns of the British public. In 2013, 65 per cent of non-homeowners aspired to own their own home, increasing year on year to 73 per cent in 2016. Assessing the views of 780 non-homeowners, 2017 has seen the first dip in numbers for five years at 71 per cent, equivalent to 253,166 people ditching the dream nationwide.

It seems that rather dreaming of owning a home one day in later life, first time buyers have accepted it might be better never than late and given up on their hopes altogether.

An unlikely story?

Jamie Forgan, lettings manager at Hotblack Desiato in Camden is sceptical about the results of the study. “I personally haven’t noticed it,” he said regarding clients giving up on their aspirations to own a home to converting to accepting being a lifelong renter,

He explained that people don’t seem to be either buying or renting in large numbers this year.

“The market at the start of this year up until about two weeks ago has been remarkably poor with not that many people looking to do anything.”

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“Certainly in the offices we work in in north west London the rental market has only just taken off for the year,” he added

There’s certainly a question of affordability, he agrees, which has fostered a move from buying to renting.

“I’m someone who once could have bought and no longer can afford to,” he adds. Concerns about house prices will come as no concern since average property price growth has annually outstripped the average increase in earnings at 4.5 and 2.6 per cent respectively according to figures from the survey. The problem is compounded in Camden where the average house price is 13.8 times the average household income.

Perhaps it’s not necessarily a trend which is seeing results on the ground just yet, but with thousands of aspirational homeowners saying they no longer see their future selves owning a home, lettings offices will likely get busier in the future.

A national epidemic

Despite the greater pressures on the capital, Londoners’ concerns about house prices are echoed in Wales and almost matched in the East of England, at 87 per cent and 85 per cent respectively. 81 per cent are troubled by housing supply in the capital, just below the 82 per cent who said the same in the South West.

First time’s the charm

The top concern across the country was still the possibility of getting on the property ladder. 86 per cent said it was an issue in 2017, up 4 per cent from last year. Amongst first time buyers, 86 per cent said that house prices were the most concerning feature and 85 per cent said saving for a deposit was a serious problem, up 3 and 1 per cent since last year respectively. 2 per cent more first time buyers were concerned about housing supply at 80 per cent.

The study argues that growing concerns could be linked to the cancellation of the fledgling Help to Buy mortgage guarantee last year. Paula Higgins, chief executive of HomeOwners Alliance said: “While we are used to stories about people not being able to buy a home until they are 40, the story has taken a turn for the worse with people increasingly giving up altogether on the dream of homeownership.

“While aspiring homeowners’ concerns about house prices, saving for a deposit and housing supply grow, the change in political rhetoric around homeownership and a lack of new homes being built in the last year, plus the removal of flagship government schemes like the Help to Buy mortgage guarantee, appear to have had a negative impact on consumer attitudes. People are feeling less optimistic about their chances of buying their first property.”

Election battleground

The results will undoubtedly throw into sharp relief the housing policies of the three major parties as announced in their manifestos last week. The Labour Party promised to guarantee Help to Buy until 2027 and will build 100,000 council and housing association homes every year by the end of the next Parliament, whilst the Liberal Democrats promised a Rent to Own scheme where rent payments would build up equity over time and would give renters a share in their home. The Conservative Party pledged a million new homes by 2020 and to support ambitious councils in their schemes.

Kim Vernau, chief executive officer of BLP Insurance who helped to conduct the study commented: “The recent housing white paper from the Government proposes a wide variety of recommendations to the market for consultation, to address issues with planning and resource, with a distinct shift away from focusing solely on home ownership. This is a tacit acknowledgment that not everyone will be able to own their home.

“It is important that post the election result, the provision of housing is seen as a critical requirement and the results of government consultations prioritised into action. In the absence of this, the opportunity for aspiring new home owners to get on the housing ladder will only continue to deteriorate.”

Paula Higgins added: “With the election approaching, it is vital that housing is placed at the forefront of the policy agenda and that whatever party is elected, it takes serious steps to address the growing concerns of aspiring homeowners.”

It’s not all doom and gloom

On a positive note, the study did find that concerns about negative equity are down from 64 per cent in 2014 to 42 per cent today. Two years ago, 65 per cent were worried about moving up the ladder, a figure which now lies at 58 per cent. The report suggests that a steady increase in house prices might be responsible for softening concerns.