Defying Generation Rent: Share to Buy
An entire generation has been defined by how out of reach home ownership is, but despite the challenges, research shows most Britons still favour buying over renting, with 9 in 10 young adults aspiring to own their own home one day.
Patterns of home ownership have fundamentally changed over the last decade.
Private renting has doubled in the last 20 years, and growing numbers of Brits across the age spectrum are renting homes for longer periods than their parents ever did.
In London, where the demand for homes is higher than what’s available, 60% of people are expected to be renting by 2025, and home ownership challenges are particularly acute for middle-income earners, individual buyers and those unable to turn to the ‘bank of mum and dad’.
The statistics can be very discouraging, and 70% of would-be first-time buyers already believe the dream of home ownership is well and truly over. Around 64% say it will become even more difficult for future generations.
Can the Home Ownership Dream be Saved?
A Share to Buy survey of 1000 six- to ten-year-olds shows the British home ownership dream starts young, with three quarters of youngsters saying they’d like to purchase a property when they’re older, and over half hoping to do so before the age of 30.
One of the biggest surveys of would-be first-time buyers asked them to rank top life goals in order of importance, and at 51%, home ownership outranked most of life’s biggest milestones, with travel (29%), retirement security (16%), starting a family (27%) and even achieving financial stability (40%) falling further down the list.
When asked why owning a home is such a crucial life goal, 56% of respondents said it was for a sense of security, while 36% see it as something to pass on to their children. Another 36% say owning is more affordable than renting.
Taking the Leap onto the Property Ladder
With so many potential first-time buyers aspiring to step onto the property ladder and the home ownership dream alive and well, what’s stopping would-be property owners from taking the leap? These are the top three obstacles:
Around 30% of would-be first-time buyers find the biggest challenge to be raising a deposit, and with the average actual deposit being £44,000, middle-income earners and those with no access to family wealth are impacted most.
Several factors come into play when considering cashflow as a barrier to home ownership, with many first-timers struggling to buy a property with their existing credit rating, or not having any existing family wealth to tap into.
Around 11% of Brits are unable to afford a home in their preferred area, while 6% struggle to borrow enough money from mortgage lenders for the property they really want to buy.
Alternative Routes into Home Ownership
First-time buyers face several barriers to owning a property, but with some assistance, many believe the hurdles can be lessened. 37% say the Help to Buy scheme should be extended beyond 2023, 35% say rent prices should be capped, and 33% say stamp duty should be cut to all homes under £500,000. In addition, 13% of people want the number of Shared Ownership properties to increase.
Shared Ownership on the Rise
Latest projections show demand for Shared Ownership is set to rise by 150% when the Help to Buy scheme comes to an end in 2023.
As one of the most popular routes to becoming a first-time home owner, Shared Ownership is one of the major ways to step onto the property ladder for those unable to meet staggeringly high deposit rates. Benefits include having to pay a smaller deposit, the potential to grow equity as property prices increase and the option of staircasing, which enables more shares to be bought on a property over time.
Get in touch to discover how Shared Ownership can help you buy a place of your own.