Guest blog from the Building Societies Association
Seven in 10 (70%) of us say that the difficulties young people have getting onto the housing ladder is one of the biggest problems we have in Britain today.
However at the same time the desire for home ownership remains strong. Almost half (48%) of people aged 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
Commenting, 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.”
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,003 adults. Fieldwork was undertaken between June 1 and 4 2018. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
- 1 2008 (%) where those aged 35 to 44 today lived 10 years ago
- 2 2018 (%) where those aged 25 to 34 today live
- 3 2028% (%) where those aged 18 to 24 today aspire to live in 10 years
- 4 Lengthening the ladder – the future of mortgage borrowing in older age ILC-UK May 2017. The full report can be downloaded here.
About the Building Societies Association
The Building Societies Association (BSA) represents all 44 UK building societies. Building societies have total assets of over £393 billion and, together with their subsidiaries, hold residential mortgages of over £302 billion, 22% of the total outstanding in the UK. They hold over £271 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 36% of all cash ISA balances. They employ approximately 43,000 full and part-time staff and operate through approximately 1,500 branches. (As at 31 March 2018).