The 10th Annual HomeOwner Survey from the HomeOwners Alliance has found widespread pessimism among those who don’t already own their own home, with more than half of non-homeowners surveyed (52%) doubting they will ever do so.
The pessimism is compounded by widespread misunderstandings about mortgages, with almost two thirds (62%) believing they would need a deposit of at least 10% despite the growing availability of lower deposit products. Half (49%) thought borrowing would be limited to four or five times their income, although several major lenders offer more.
The survey of 2,000 UK adults, which included 1,700 homeowners and more than 550 aspiring homeowners, also revealed confusion over previous credit history, with two thirds (65%) believing bad credit would rule them out of a home loan. A quarter (25%) thought mortgages weren’t an option until a property had been found.
Three-quarters (74%) said financial factors such as mortgage rates, deposits and stamp duty would need to improve to make moving easier.
Combined, these misconceptions mean many people are ruling themselves out of the housing market before exploring their options, according to HomeOwners Alliance chief executive Paula Higgins.
“It is deeply concerning that more than half of aspiring homeowners believe they will never get onto the ladder,” she said. “Some face very real affordability barriers, but others may be counting themselves out because of outdated assumptions about deposits, borrowing limits or their eligibility for a mortgage.”
Misconceptions were also rife among home owners. Research conducted in partnership with LifeSearch found “major misunderstandings” about income protection and “a worrying lack of preparation” for the financial impact of being unable to work.
Almost half of the home owners questioned mistakenly believed income protection would cover redundancy, and 19% assumed the government would support them with costs if they couldn’t work. Four in 10 home owners who have protection said they’d never reviewed their cover.
Higgins concluded: “Across the housing market, consumers want to act but often lack confidence, clear information and protection. Unlocking the market means making it easier and safer to buy, move, plan for later life and improve a home.”
