Wednesday 13th June 2012
The struggles facing young people as they try to get on the property ladder are affecting the financial future of their families, with the bank of mum and dad feeling the strain.
One third of parents are concerned for their own financial future, with 44% of them forking out an average of £12,800 towards their children’s deposits, and 6% contributing to monthly mortgage payments, while 24% have had their children move back home as adults due to the current housing market.
New research by Halifax and NatCen Social Research shows that half of 20 to 45-year-olds think Britain will become a nation of renters within a generation, with most believing that their mortgage applications will be refused.
The latest research updates that of a year ago when Halifax identified and named Generation Rent.
Separate research out today by YouGov, published by the Council of Mortgage Lenders, shows that 81% of British adults hope to own their own home in ten years’ time and 74% in two years – with aspirations far exceeding the current reality in the younger age groups.
But, says the CML, it is ‘far from clear whether and how people will achieve their home ownership goal’.
Meanwhile, Stephen Noakes, mortgage director at Halifax, said: “One year on, young people are still downbeat about their chances of owning a home, and we’re also seeing the impact this has on their parents’ financial future.
“Parents think that their kids could make cutbacks on holidays and going out in order to save for a deposit. However, despite concern for their own financial future, parents continue to stump up a contribution or welcome their children back to the nest to allow them to save.”
Just over half (54%) of 20 to 45-year-olds believe that Britain should remain a nation of home owners, with an overwhelming 78% agreeing that it is a good financial investment. However, despite this, of the 8,042 people aged 20 to 45 questioned:
• 25% do not want to own a home (an increase of two percentage points on 2011)
• Two in five (40%) would like to buy a home but do not believe they will ever be able to
• Just 31% have a serious intention to buy within the next five years
• 50% believe Britain will become a nation of renters within a generation (up four percentage points since 2011).
The size of a deposit, high house prices and job security were identified as the top three barriers to home ownership, with the average FTB deposit standing at £24,647.
Nearly three in five (59%) potential home owners believe that lenders accept less than 40% of mortgage applications.