The latest research by HomeOwners Alliance shows that for many young people, homeownership has become an impossible dream. 1.9 million aspiring homeowners do not think they will follow in the footsteps of their home owning parents. Three quarters (73%) of aspiring homeowners say their parents owned their home, but only 48% expect to own themselves (a drop of 25%).
Fewer homeowners today means fewer homeowners in the future. Our research reveals that most homeowners follow in the footsteps of their home owning parents (81% of current homeowners versus 68% of non homeowners say their parents owned their home). This suggests that as homeownership declines so do the prospects of future generations to own.
And the dire picture of homeownership in the UK doesn’t stop there:
● The majority (71%) of Brits who do not own their home, aspire to do so in the future. But more than half (52%) of these 7.5 million aspiring homeowners - 3.9 million - do not think they will ever be able to
● Top reasons for not owning include: high house prices (60%), saving for a deposit (44%), ability to afford monthly mortgage repayments (33%) and the ability to get approved for a mortgage (31%).
● 28% of younger homeowners rely on government schemes in order to afford a home. This is more than three times then UK homeowners overall (9%)
● 30+ year mortgage terms are becoming the norm. More than 1 in 3 (38%) homeowners aged 18-34 have a term of 30 years or more vs 15% of UK homeowners overall
● 1 in 5 homeowners (20%) aged 18-34 rely on the Bank of Mum and Dad, making the Bank of Mum and Dad one of the biggest lenders
Non homeowners cited affordability as the main barrier to getting on the housing ladder: high house prices (60%), saving a deposit (44%), and being able to afford the mortgage (33%). And so, it is no surprise that younger homeowners aged 18-34 are three times more likely to depend on government schemes like the lifetime ISA, Help to buy equity loan or shared ownership (28% of homeowners aged 18-34 vs 9% of homeowners overall used government schemes to help them buy).
Commenting on the findings, Chief Executive of the HomeOwners Alliance, Paula Higgins said,
Brits are giving up on their dream of homeownership, our damning survey reveals. The government has failed aspiring homeowners, and continues to degrade the life chances of young people by continually not building enough homes.
This shortage of new homes has led to rocketing house prices, leaving aspiring homeowners dependent on Mum and Dad to bolster savings or by locking themselves into longer term mortgages which cost them more in the long run. While over a decade of low mortgage rates helped the over 35s to buy a place, in today’s broken Britain, homeowners rely on government schemes to get them out of this mess and bridge the affordability gap - except the government’s flagship Help to Buy programme has ended with nothing to fill the void.
So here we are, at a tipping point. 4 million of the 7.5 million aspiring homeowners in the UK don’t think they will ever be able to own their home. And almost 2 million don’t think they will follow in the footsteps of their home owning parents. We know that the fewer people that own, the worse the prospects of homeownership are for their children.
With the upcoming election a key issue will be how the parties plan to build more homes and provide much needed support to first time buyers.
HomeOwners Alliance publishes a suite of resources to help first time buyers navigate the world of property and to give them the knowledge and insight to get onto the property ladder. Our more popular pages include:
- Our guide to buying your first home
- Is buying the right thing to do? Pros and cons of buying versus renting
- Mortgage advice for first time buyers as well as a mortgage tracker
- A roundup of all the first time buyer schemes in 2024
- How parents can help their children buy their first home
