Millions give up on homeownership for good
A “lost generation” of more than four million adults have given up on the idea that they will ever own a home.
Only one in seven adults not currently on the property ladder believe they can afford to buy a home before they are 30, according to new research from Castle Trust.
This follows a survey by housing charity Shelter showing that average earners need a £29,000 pay rise to keep up with soaring house prices.
More than 50% of non-homeowners are prevented from buying a property because they can’t afford the deposit, according to Castle Trust, which offers investment Isas linked to the Halifax house Price index.
Others will struggle because they don’t earn enough, or have credit rating problems.
Children today who wish to get on the property ladder will be increasingly reliant on capital gifted to them by their parents or grandparents, the research showed.
Of those who still plan to buy their first home, 53% intend to raise their deposit through savings accounts, despite today’s all-time low returns.
Another 12% will borrow from parents, 5% intend to ask grandparents for money and 9% are waiting to receive an inheritance. One in four don’t know how they will raise a deposit at all.
Chief executive Sean Oldfield said that of the 4.1 million adults who have given up on owning a home, 1.8 million are aged 25 to 44.
“The biggest challenge is finding a way to save a deposit which keeps pace with rising house prices.
“The savings market is offering desperately low returns, even the best products struggle to get above 2%, and that is before tax is deducted.
“The Halifax House Price Index, by contrast, has risen by 7.8% during the last 12 months alone.”
Oldfield added: “The failure of the young to break into the housing market has some very serious social implications.”
Article courtesy of Introducer Today