A growing number potential first-time buyers have given up on the idea of owning their own home and are instead accepting the idea of long-term renting.
The number of people aged between 20 and 45 who are saving for a deposit to buy their own home has fallen six percentage points to 43% compared with a year ago, according to a new Generation Rent report from Halifax.
Of the 40,000 20 to 45-year-olds and 4,000 parents with children aged between 20 and 45 surveyed by the Halifax, 79% believe banks do not want to lend to first-time buyers, and 21% consider it “virtually impossible” to obtain a mortgage.
However, figures from the Council of Mortgage Lenders reveal the number of first-time buyers getting on the property ladder last year reached its highest levels since 2007.
Although government schemes such as Help to Buy pushed up sales to first-time buyers increasing by more than a fifth last year to 311,500 by enabling them to get on the property ladder with a low deposit, just 53% of people surveyed say they believe the scheme has had a positive impact, while 8% think it has had a negative impact.
Londoners are the most downbeat about their prospects of owning their first home. A total of 82% of worry they will never be able to buy a house, citing high prices as the biggest barrier to getting on the property ladder.
The capital has the lowest prop¬ort¬ion of homeowners in the 20-45 age group at just 39% compared with 50% for the rest of the UK. It also has the highest proportion of people who say they do not want to raise their children in rented property (51%).
Those who have not given up on the dream of getting onto the property ladder are now prepared to save for an average of 5.35 years.
Craig McKinlay, mortgages director at Halifax, commented: “While there has been an increase in first-time buyers in the last 12 months, at the same time there is also a growing group of young people who believe they won’t be able to get a mortgage.
“The difference between the reality and their perception needs to be addressed urgently if we are to prevent people from giving up on getting on the housing ladder.”