Six out of ten renters never expect to buy
Its analysis of the latest ONS English Housing Survey shows that three million social renters and 1.5 million private renters don’t believe they will ever buy a home – around 61% of the population.
Of those that do envisage buying a home, half – around 1.5 million – think it will be five years or more before they will look to buy.
Sean Oldfield, Castle Trust chief executive, said: “Many people are either unable to get on the property ladder or stuck in their current home despite interest rates still being at an all-time low. Schemes like the Government’s Funding for Lending are helping to boost borrowing options but the market still needs innovative lending products.”
Castle Trust’s analysis also showed that owner occupation in England has decreased by 200,000 from 14.6 million in 2008 to 14.4 million in 2012. However the number of private renters in England in 2012 increased to 3.8 million, an increase of 23% from the 2008 figure of 3.1 million
For many, owning a home does not appear viable. With the number of renters on the increase and owner occupation falling, Castle Trust believes that the development of innovative mortgage products is crucial in creating a competitive sector that provides increased choice of mortgage options for potential homebuyers.
Around 2.8 million owner occupiers in England have lived in their current home for over 30 years suggesting they have not traded down on retirement to free up equity in their home. Moreover the median tenure for owner occupiers has risen from 11 to 13 years since 2008/09.
Oldfield added: “The risk of rising mortgage rates is a major issue for homeowners with their finances already under pressure. Shared equity can play a major role in reducing risks, including the risk of going into arrears, by cutting monthly mortgage commitments.”