More than half of renters aged between 25 and 44 had expected to own their own home by this stage in their lives, with 33% resigning themselves to never getting on the property ladder.
Research from the Building Societies Association (BSA) found that 59% of people aged 25-44 and 43% of all adult renters had been unable to buy their own home in the timeframe they had expected. Raising the deposit was cited as the main reason for not being able to purchase property, with 61% of those surveyed saying it was an issue.
The survey was carried out for the BSA’s Property Tracker and echoes the conclusions of the organisation’s April report, which found 2.2 million potential buyers are ‘missing’ from the property market. An analysis of historic first-time buyer data showed that around 7.2 million people would have been expected to buy their first home since 2006, but only five million achieved home ownership.
Whilst some renters remain optimistic, with around a third (31%) of 25-44 year olds thinking they will be able to buy a home within the next five years, a similar number (33%) want to buy their own home but don’t think they will ever be able to achieve this.
The majority of 25-44 year olds want to be homeowners and the proportion is growing. Five years ago, 15% of renters said they didn’t want to buy their own home. Today, just 8% of renters say they have no aspiration to buy their own home.
Affordability remains the main barrier to home ownership. Accessing a large enough mortgage prevents 43% of people from buying a home, with 60% of respondents saying they can’t get on the property ladder because they wouldn’t be able to afford mortgage repayments.
Job security was cited as an issue by just over a quarter (26%) of those asked – up from 19% two years ago. ‘This likely reflects the slow but gradual increase in unemployment and the fall in job vacancies in recent years’, the BSA said.
Although property industry experts remain confident in the market, the opinion of renters isn’t quite as optimistic. Only 15% of those asked think now is a good time to buy a property, down from 20% in January.
‘Looking at renters aged 18-24, who are expected to be the next generation of homeowners, we see hope and hesitation’, the BSA said.
“The majority aspire to home ownership, with 86% saying they would like to get on the property ladder. Many are optimistic about when they will achieve this, with over a quarter (28%) believing they will become a homeowner in the next five years.
“However, one on five (19%), don’t think they will ever be able to achieve this, up from just 12% five years ago.”
Paul Broadhead, head of mortgage and housing policy at the BSA, added:
“Our studies into first-time buyers show that they face the toughest conditions in over 70 years. That comes into sharp focus when you see the statistics of the number of people in rented accommodation who have been unable to achieve their dream of homeownership in line with their life plan.
“It’s shocking that 2.2 million first-time buyers who would have reasonably expected to buy their own home have failed to do so since the financial crisis. And the research shows how quickly that number is growing – in 2020 only 12% of 18–24 year olds felt homeownership was out of reach, today that figure has increased to 19%.
“We can’t remove the barriers to homeownership overnight, and there won’t be a solution that enables everyone to get on the property ladder. But there is more that can, and must, be done, including regulatory flexibility and Government focus on long-term solutions, such as increasing housing supply, rather than short-term demand-side boosts.
“Our first-time buyer reports provide several tangible actions that could be implemented to help fix the broken housing market and in turn support today’s aspiring homebuyers as well as next generation. Every day that passes without real action raises the number of potential lifetime renters.”
