According to Vida’s research, a fifth (18 per cent) of renters said that even before the crisis they struggled to find a lender that was willing to give them a mortgage.
Two in every five (40 per cent) people also said that the biggest barrier to owning a home is being able to save a large enough deposit.
This problem is widespread throughout the UK, with more than two-thirds of under 25s now renting (up from less than half 20 years ago).
The coronavirus pandemic looks set to see this Generation Rent demographic grow even larger as people across Britain start to feel the effects of Covid-19.
Two-thirds (66 per cent) of Britain’s renting population aspire to own their own home, but Vida’s research shows that one in five of these renters (19 per cent) are now finding it harder than before to step onto the housing ladder because of Covid-19.
The figures include a fifth (20 per cent) of key workers currently renting, who now have to reconsider their plans to buy.
The research also found that more than a quarter (28 per cent) of renters who have had to push back their plans to buy specifically say that the virus has caused a fall in income which has made buying less likely.
Some 29 per cent thought that that stricter lending requirements have made it much harder to find a mortgage. Since the crisis started, a large number of lenders have had to put in place more stringent underwriting measures when assessing customer affordability, for instance.
Specialist solutions
With the ramifications of Covid-19 likely to be felt for some time to come, it would be easy for those aspiring homeowners that may have been underserved by the mortgage market to think they may never get on the housing ladder.
However, there are many specialist solutions available in the market for those who struggle to fit the traditional high street credit criteria. For many of these individuals, the specialist market could help them achieve their homeownership goals.
If the last year has taught us anything, it’s that if the “perfect borrower” ever did exist, they will be even harder to find once the UK emerges from the pandemic. More than 9.9m people were furloughed as a result of Covid-19.
Amid the millions of furloughed borrowers, recent research from Citizens Advice has also found that a quarter of borrowers missed or expect to miss payments on at least one bill as a result of the crisis.
