Youth giving up on property dream
The figures come from the Council of Mortgage Lenders which also said that regardless of age aspirations to home-ownership had declined since 2007. Although 76% of British adults still wanted to be owner-occupiers in the next two years.
“Given the steadily worsening affordability problems for young first-time buyers, this decline in short-term aspirations may simply reflect a more realistic assessment among those in this group of their prospects of becoming owner-occupiers at a young age,” said the trade body.
However, long-term aspirations to own a home however remain entrenched.
When asked if they would like to be home-owners in 10 years’ time, 85% of British adults responded positively – up from 84% in 2007, despite the difficulties in the intervening period, and the highest response recorded in 35 years the CML has asked this question.
But figures from the English Housing Survey show that owner-occupation peaked in 2003 at 70.9% of the population but by 2008/9 it had declined to 67.9%.
The CML said with aspirations moving in the opposite direction to owner-occupation levels, a gulf appears to be widening between people’s wishes and their capacity to fulfil them.
“For young adults, a combination of the mortgage funding shortage, falling or static house prices, a risk-averse approach to lending and borrowing, and the additional costs for lenders of advancing mortgages at higher loan-to-value ratios have produced a market in which first-time buyers now typically have to find a deposit of more than 20% of the price of the property,” said the CML.
“Now, the prospect of even higher levels of student debt in the future is likely to bear down further on the prospects of being a home-owner in young adulthood.
“For the government to deliver what it hopes will be an age of aspiration – and spread the benefits of home-ownership to adults of all ages – it needs to develop and pursue policies that will improve the availability of mortgage funding, help address the affordability problems for first-time buyers, and ensure that regulatory reform does not unnecessarily exclude people from the benefits of home-ownership.”