Almost 2 million aspiring homeowners do not think they will be able to follow in the footsteps of their parents as the generation gap worsens.
The latest research by HomeOwners Alliance suggests that for many young people, homeownership has ‘become an impossible dream’. According to the survey 1.9 million aspiring homeowners do not think they will follow in the footsteps of their parents, who own homes. The HomeOwners Alliance claim that three quarters (73%) of aspiring homeowners say their parents owned their home, but only 48% expect to own homes themselves.
The organisation suggests:
“Fewer homeowners today means fewer homeowners in the future. Our research reveals that most homeowners follow in the footsteps of their home owning parents.
“81% of current homeowners versus 68% of non homeowners say their parents owned their home. This suggests that as homeownership declines so do the prospects of future generations to own.”
In what has been described as a ‘dire picture of homeownership in the UK’ research from the latest survey demonstrates that:
“The majority of Brits who do not own their home, aspire to do so in the future. But more than half of these 7.5 million aspiring homeowners do not think they will ever be able to.”
Commenting on the findings, Chief Executive of the HomeOwners Alliance, Paula Higgins said:
“Brits are giving up on their dream of homeownership, our damning survey reveals. The government has failed aspiring homeowners, and continues to degrade the life chances of young people by continually not building enough homes.
“This shortage of new homes has led to rocketing house prices, leaving aspiring homeowners dependent on Mum and Dad to bolster savings or by locking themselves into longer term mortgages which cost them more in the long run. While over a decade of low mortgage rates helped the over 35s to buy a place, in today’s broken Britain, homeowners rely on government schemes to get them out of this mess and bridge the affordability gap – except the government’s flagship Help to Buy programme has ended with nothing to fill the void.
“So here we are, at a tipping point. 4 million of the 7.5 million aspiring homeowners in the UK don’t think they will ever be able to own their home. And almost 2 million don’t think they will follow in the footsteps of their home owning parents. We know that the fewer people that own, the worse the prospects of homeownership are for their children.
“With the upcoming election a key issue will be how the parties plan to build more homes and provide much needed support to first time buyers.”
Top reasons for not owning include:
- High house prices (60%), saving for a deposit (44%), ability to afford monthly mortgage repayments (33%) and the ability to get approved for a mortgage (31%).
- 28% of younger homeowners rely on government schemes in order to afford a home. This is more than three times then UK homeowners overall (9%)
- 30+ year mortgage terms are becoming the norm. More than 1 in 3 (38%) homeowners aged 18-34 have a term of 30 years or more vs 15% of UK homeowners overall
- 1 in 5 homeowners (20%) aged 18-34 rely on the Bank of Mum and Dad, making the Bank of Mum and Dad one of the biggest lenders
Findings have shown that non-homeowners cited ‘affordability as the main barrier’ to getting on the housing ladder. High house prices have also been a concern alongside saving for a deposit. 33% of those surveyed commented that ‘being able to afford the mortgage’ was also a factor in the decision making process. The HomeOwners Alliance say ‘it is no surprise’ that younger homeowners in the 18-34 age range are reportedly ‘three times more likely’ to rely on government support and schemes such as the lifetime ISA or Help to Buy equity loans. Shared ownership is also said to be a consideration for 28% of homeowners in this age group.
