More needs to be done to help first time buyers gain a foothold on the property ladder, the Council of Mortgage Lenders (CML) has said.
While young people still aspire to own their own home, the number of those who think it is realistically achievable in the next few years has dropped significantly. Between 1983 and 2010, the number of adults aged under 25 who want to be homeowners within the next two years has halved from almost 80% to around 40%.
"Although we have seen a decline in the proportion of people who are owner-occupiers, it remains overwhelmingly the most popular tenure," said the CML.
Changing lifestyle choices – the path of leaving school and quickly getting a job, getting married and buying a home has become far less prevalent over the last 30 years – have played a part, as has the expansion of the private rented sector.
In more recent times, young adults have faced the multiple problems of mortgage funding shortages, unpredictable house prices, a risk adverse approach to lending and the costs of higher loan-to-value mortgages.
All of this is reinforcing the concentration of housing wealth in the hands of older households. Over the next 20 years or so, demographic trends will exacerbate this.
Between 2006 and 2026, the number of UK households aged 60 or over is projected to increase by 3.3 million to 12.2 million, or by 37%.So, the recent constraints on first-time buyers will reinforce a trend in which the bulk of owner-occupiers are those aged in their 40s, 50s or early 60s.
"For the government to deliver what it hopes will be an age of aspiration – and spread the benefits of home-ownership to adults of all ages – it needs to develop and pursue policies that will improve the availability of mortgage funding, help address the affordability problems for first-time buyers, and ensure that regulatory reform does not unnecessarily exclude people from the benefits of home-ownership."
Across the wider market, the problems that began in 2007 have seen owner occupier numbers fall slightly, from a peak of 70.9% of the population in 2003 to 67.9% in 2008/09. Despite the challenges, figures show that home ownership is still something that Britons strive for.
When asked if they would like to be home-owners in 10 years' time, 85% of British adults responded positively – up from 84% in 2007 (despite the difficulties in the intervening period) and the highest response ever recorded in 35 years of asking the question.
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