Buy To Let Updated:
Do you dream of owning your own home or have you given up on the idea altogether? It looks as if Britain could be losing its obsession with homeownership, according to a comprehensive study called Generation Rent conducted by Halifax, with many 20-45 year olds accepting the reality of having to rent rather than buy.
It's not just the fact that young people are being forced to rent, but their perceptions appear to be changing too, with one in five 23 – 27 year olds surveyed stating they have no desire to own their own home.
The hard slog to save up a substantial deposit, while house prices are increasing all the time, seems to be putting potential homeowners off with many not willing to make the sacrifices needed. Many would need to downscale their rental property, and it seems 86% of potential homeowners refuse to compromise on the quality of the accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit.
The cost of renting a home in the UK is now on average £1,488 a year higher than owning - so ownership would be preferable if it could be afforded - but if people are unable or unwilling to live with parents to save, then they are unlikely to be able to build up any kind of decent deposit. In fact 57% of would-be first-time buyers say they would like to save but claim not to have any spare cash in order to do so.
The younger generation seems to have the 'live for today' attitude – perhaps because saving that large of a deposit seems such an unattainable goal - and 36% of those that don't want to own feel the nation should lose its obsession with homeownership, and would be happier as a result.
There seems to be a cycle appearing with 49% of those who are not concerned with ownership having been brought up in rented accommodation themselves, reflecting the factor that attitudes are changing. Of those surveyed, 48% agree Britain will become a nation of renters within the next generation, while 46% feel we are becoming more like Europe where renting is "the norm".
Craig McKinlay, mortgages director at Halifax, said: "With attitudes softening towards the social implications of renting, and the number of people who say they will never own a property increasing, we may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration simply to live in one.
"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."
However, it seems those already on the property ladder are a little critical of the younger generation with 56% saying that people aren't willing to make the necessary sacrifices to get on the ladder and 57% feeling first-time buyers are guilty of trying to find their perfect property rather than adjusting their expectations to their means.
The implications of "generation rent" go deeper than the individual longing for home ownership; if younger people decide to rent long-term then the wealth gap will widen, with many not having the financial backing of property to turn to in older age. This highlights the importance of longer-term saving, and if people want financial stability later in life they will still need to try to find left over cash at the end of the month to put into an ISA or a pension scheme.
However, in happier news for those that are renting, they should soon be enjoying stronger protection from unscrupulous letting agents, as all letting and property management agents will be required to join an approved 'redress scheme' later this year, as outlined by housing minister Kris Hopkins last week.
There will be three compulsory redress schemes – The Property Ombudsman, Ombudsman Services Property and The Property Redress Scheme – and they will give tenants and leaseholders a right to fair and transparent treatment from their letting agent and a straightforward route to take action if they get a poor deal.
Many agents are already signed up to one of the three organisations and the remaining companies will be encouraged to do so before it becomes a legal requirement later in the year.
So, it appears that the home ownership dream could be becoming a thing of the past, with many younger people favouring quality in their current living standards and accepting that home may well be where the heart is - but it doesn't always have to be one that is bought.
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