According to new research, 70% of us say that the difficulties young people have getting onto the housing ladder is one of the biggest issues we have in Britain today.
At the same time, the desire for home ownership remains strong. Almost half of people polled between 25 and 34 today who aren’t on the property ladder say they want to own their own home within the next 10 years.
However, many in this age-group are highly pessimistic about their prospects of achieving home ownership even if they wait a decade: 41% think that the achievement of their dream is unlikely.
The past, current and future accommodation that young people between 25 and 34 live in clearly shows:
• A significant drop in those who own their own home – down from 40% in 2008 to 33% today.
• But a significant number (62%) want to own their own home by 2028.
• By 2028 far fewer want to be living in private rented accommodation – down from 31% today to 9%.
• Today 14% of the so-called boomerang generation live in a property owned by a friend or relative. This is not somewhere that many of today’s 18-24 year-olds see themselves living in 10 years – just 3%.
High house prices driven primarily by insufficient housing supply is one of the root causes of an issue which has significant societal and economic impact.
In practical terms the primary issues that 25 to 34 year olds say that they face are:
• 76% - Raising a deposit
• 46% - Access to a large enough or any mortgage
• 43% - affordability of mortgage payments
• 29% - Job security
• 18% - Concern that property prices may fall in the future
• 15% - Stamp Duty costs
• 12% - Finding the right property
• 11% - the complexity of the home buying process
Paul Broadhead, Head of Mortgage & Housing Policy at the BSA, said: “It is stark and worrying how gloomy many young people are about their chances of future home ownership. With the average age of a first time buyer standing at 33, this is the very group most likely to be considering buying. If they are right and their chances in 10 years-time are still bad the societal divide and economic impact already being felt can only grow.
Without a massive push to build more homes to overcome the deficit of decades it is hard to see that things will improve. Mortgage lenders also have a part to play to break down the barriers. As part of this the BSA has just commissioned a project to explore the potential for intergenerational lending -unlocking some of the housing wealth of the baby boomers. We are at the start of the process so cannot pre-judge outcomes but with around 39% of all housing wealth owned by the over 65’s4 already it is a valid part of the mix.