A generation of renters are giving up on the prospect of owning their own homes, a new report has revealed.
Research conducted by Halifax has found that while the vast majority of non-homeowners still aspire to buy a home of their own, fewer think they will ever be able to do so.
More than three quarters of people that don't currently pay a mortgage said they would like to buy a home in the future, yet nearly half of 20-45 year olds believe the UK is becoming more like Europe where renting is seen as the norm.
It means that we could become a nation of renters in the next generation.
A combination of a perception that banks are not lending, the size of deposits needed and a fear of the application process have spooked 'Generation Rent', with two thirds of non-homeowners believing they have no chance whatsoever of buying a property.
Perhaps because of this, renters are making little attempt to save for a deposit.
Only 5% of this group is making sacrifices to save for a deposit. Ninety-five per cent say they have no spare cash, no interest in saving for a deposit or were trying to save but failing to do so.
However, Robert Sinclair, Director of the Association of Independent Financial Advisers, has said the mortgage industry needs to do more to get the message across that there are still affordable and suitable products for first time buyers.
"There's been a vast amount of press over the last two years that has said you need a deposit of £40,000 or more to buy your first home," he told Moneyfacts.co.uk.
"I think that has meant that you've got potential first time buyers out there that are not even looking at the housing market as they don't think that the right products for them are available.
"It means there are people that might be looking that are not eligible and others that do have the necessary finance to buy a home but don't think they can."
Mr Sinclair's views were echoed by Halifax Mortgage's commercial director, Stephen Noakes, who 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."
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