A generation gives up on buying a house

Britain is home to a generation of renters who are giving up on buying their own home, says a report out today. They expect their mortgage applications to fail, so don't even bother to apply.
 
If attitudes become reality, the shape of Britain’s housing market will be fundamentally changed within a generation.

According to the research into the attitudes and behaviour of young people towards home ownership, 77% of all those who do not own a home still aspire to owning one.
 
However, despite this aspiration, nearly half of 20 to 45-year-olds say Britain is becoming more like Europe where renting is seen as the norm, and predict that Britain will become a nation of renters within the next generation.

Produced by the National Centre for Social Research, the report analysed the results of a survey of 8,000 20 to 45-year-olds and identified the emergence of ‘Generation Rent’: two-thirds (64%) of non-home owners who believe they have no prospect whatsoever of buying a home.

The perception that banks are not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented ‘Generation Rent’ from making any significant attempts to buy a home.

Longer term, only 5% of this group are making sacrifices to save for a deposit; 95% say they have no spare cash, no interest in saving for a deposit, or were trying to save but failing to do so.

Stephen Noakes, commercial director of Halifax Mortgages, said: “Our research indicates just how many potential first-time buyers are not making it to the application stage because of a fear of being declined.

“We would like to help aspirational home buyers to realise they do have options, that they can apply for a mortgage, and that it is still possible to get on to the property ladder. At Halifax we approve eight out of ten mortgage applications from first-time buyers, and it is important that today’s potential first-time buyers don’t miss out because of the fear of rejection.”

The report revealed widespread pessimism about lenders and the mortgage application process: 84% say first-time buyers are put off by a belief that banks do not want to lend to them and find excuses to turn them down, and 60% believe getting a mortgage is very hard or virtually impossible.

Almost seven in ten (67%) believe that everyone is rejected by lenders so there is little point in applying.