50% of people renting believe they will never buy
Home ownership has become a distant dream for half of those living in rented accommodation due to strict lending criteria, a survey from Safestore has found.
The Moving, Improving and Renting Index, which maps moving behaviour in the UK every six months, showed that 50 per cent of tenants believe they will never own a home and 42 per cent said inheriting money or a house was their best chance of ever getting a property.
The UK-wide poll of 2058 adults revealed that the main obstacles to homeownership were a lack of deposit and strict lending criteria. Among those surveyed, 29 per cent said the deposit was the biggest hurdle and 17 per cent said getting a mortgage was impossible.
Peter Gowers, chief executive for Safestore, said: “At a time when people are continuing to struggle to make their first step onto the property ladder, we are seeing more people moving into rented accommodation.
“The index shows the extent to which a large proportion of the British population is resigning itself to never owning their own home and believing that their best hope of ownership is through inheritance.”
Half of the tenants in the survey said the rental market was a “landlords’ market” where demand in their area was high and properties were scarce. A further 32 per cent said they move home regularly or “quite often”, rarely staying in a rental property for more than a year or moving every few years.
More than half of those aged 55 and over and those aged 35 to 44 who aspire to own a home said they were relying on inheritance.
As reported in Financial Adviser, mortgage lenders are increasingly cherry-picking borrowers and imposing strict lending criteria, which means the smallest blemish on a credit history can prevent someone from getting a mortgage.
As a result, the private rental market is booming from tenants unable to get onto the housing ladder.
In fact, the housing crisis is so severe that the number of young people returning to live with their parents increased by 20 per cent between 1997 and 2011, figures from the Office for National Statistics have shown.
The increase coincides with a huge surge in the average house price paid by first-time buyers, which rose by 40 per cent between 2002 and 2011, and low-wage growth.
Ronan Marrion, mortgage adviser for Cornwall-based Worldwide Financial Planning, said: “Getting a mortgage is difficult for people trying to push the boundaries, but if you borrow within reason and have a 15 per cent deposit you can borrow at decent rates.”