First-time Buyer  

Generation rent hit hard by pandemic

Generation rent hit hard by pandemic
Credit: Chris Ratcliffe/Bloomberg

One in five renters looking to buy their own property are finding it harder to step onto the housing ladder due to Covid-19, according to Vida Homeloans.

Research from the specialist lender found 19 per cent of renters who aspire to own a home are finding it more difficult to join the property ladder because of the pandemic.

The August survey of 2,000 adults found 28 per cent of renters, who have had to postpone their plans to buy, said a fall in income due to the pandemic had hampered their chances to buy.

The pandemic forced 27 per cent to dip into funds that otherwise could have been used to buy their own property.

Three in 10 (29 per cent) said stricter lending requirements had made it much harder to find a mortgage.

Anth Mooney, CEO of Vida, said: “Generation rent has been hit hard by the pandemic. While some younger buyers are lucky enough to get help from the bank of Mum and Dad, millions of individuals underserved by the mortgage market are stuck in a cycle of renting. Finances have been hit by furlough and/or sudden loss of income or job security.”

Mr Mooney added the problem was not confined to younger renters.

He said: “From the over-55s who have always aspired to own their own home to the key workers – the nurses, the social workers and the supermarket delivery drivers that are putting themselves at risk to keep us safe during this pandemic – generation rent spans all of the ages.”

The survey from Vida also found 18 per cent of renters said they had already struggled to find a lender that was willing to provide a mortgage before the pandemic, while four in 10 said the biggest barrier to home ownership was being able to save a sufficient deposit.

It comes after research by Halifax found the average deposit paid by a first-time buyer increased by almost a quarter (23 per cent) to £57,278 last year, compared to £46,449 in 2019.

Andrew Montlake, managing director of Coreco, commented: “It is challenging at the best of times to purchase a home with house prices having risen, fuelled by pent-up demand and the stamp duty holiday, whilst higher rents and increases in the cost of living make saving for a deposit trickier.

“The concern is that the gap between the haves, those that are lucky enough to have larger savings pots or assistance from parents and family, and the have-nots is getting wider and wider.”

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