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Tuesday 25th of May 2010
March 22, 2010    

Young Britons prepare for 10-year wait on home ownership

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by Gill Montia

Buying a home has become a pipe dream for millions of young Britons, the National Housing Federation (NHF) claims.

Research by the body, which represents England’s housing associations, suggests that 50% of those wanting to get a foot on the property ladder are preparing for at least a 10-year wait.

The YouGov survey commissioned by the NHF also revealed that 86% of 18 to 30-year-olds questioned could not currently afford to buy, despite recent price falls.

Furthermore, 83% of this age group also thought buying a home was now more a dream than a reality.

The Federation blames their gloomy outlook on a chronic shortage of affordable homes and a slump in the number of new homes being built.

The report also comments: “With huge deposits now needed to secure mortgages, young adults are becoming reliant on their parents’ help – and deep pockets – to help them secure their first property, with 54% admitting they would need financial help from relatives or generous friends to buy a home.”

Last month, the Council of Mortgage Lenders (CML) said it expects the UK to see a smaller proportion of homeowners and a higher proportion of tenants (mostly in the private sector) in the years ahead.

The CML’s head of research, Bob Pannell, estimated that today’s first-time buyer needs a deposit of around £34,000, whereas three years ago, the deposit required to enter the market was a much more manageable £12,700 - the difference can be attributed to tighter lending criteria.

The lenders’ body also suggested that, in future, private sector funding constraints and public sector cutbacks are likely to produce a significant shortfall in the supply of both housing finance, and housing itself.

Between 1999 and 2009, the number of new homes built each year ranged from around 130,000 to around 170,000.

However, the Government’s National Housing and Planning Advisory Unit estimates that between 238,000 and 290,000 new homes are needed per year to meet housing need.

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Tags: afford to buy, , , , , new homes, NHF, , , tighter lending criteria, young