The report, commissioned by the Halifax Mortgage company from the National Centre for Social Research states that 77% of all non home owners still hope to become home owners. However, despite this aspiration, nearly half of 20 to 45 year olds say Britain is mirroring the rest of Europe where renting is seen as the norm and believe that Britain will become a nation of renters within the next generation. This generation has been coined “Generation Rent.”
According to the report “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.”
What is interesting about this survey is that it typifies a marked change in attitude towards home ownership that is largely attributed to the recent credit crunch. Renters are overwhelmingly pessimistic, and seem to equate rejection, anxiety and fear with seeking financing.
Stephen Noakes, Commercial Director, and Halifax Mortgages, commented: "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 onto the property ladder."
Highlights from the report include: 84% say that 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; 92% see it as hard for first-time buyers to get a mortgage, with 60% seeing it as very hard or virtually impossible; 67% believe there is a general perception that everyone is rejected by lenders so there is little point in applying; 61% say that first time buyers do not want to go through the stress and anxiety of applying for a mortgage.
Alison Blackwell, NatCen report author, commented: "The phenomenon of Generation Rent could have major socio-economic implications. It would mean fewer homeowners being able to buy and therefore fund the construction of the new homes required in the UK to meet demand, resulting in a slowing down in the housing market. It could open up a widening of the wealth gap that already exists between home-owners and non home-owners. And people in Generation Rent risk insufficient finances at retirement."
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