Ive often reported on the changing fortunes of the property market alongside our regular poll of estate and property agents in the region, now Id like to turn to a potentially even more far-reaching change in the market. Those already on the property ladder are continuing to climb it, and those not yet there, are still fuelling a healthy rental sector. However, according to new research, there is a growing number of younger people content not to climb onto the property ladder at all, or so it seems.
Almost half of non-homeowners aged 25 to 34 dont believe they would ever be able to buy a home, according to research by mortgage and home loans broker Ocean Finance. It found that 28% of non-homeowners questioned would like to be able to buy a property one day, and expect to be able to do so. Conversely, forty per cent of those questioned say that while they would like to be able to buy a home in the future, they do not expect they will ever be able to do so. Meanwhile, a third (32%) of those questioned claimed they are happy to continue renting and have no interest in buying. These findings may suggest that peoples attitude to owning could be changing, whether through opinion or circumstance, and there are a number of possible reasons for this.
Rising house prices mean that even saving for the deposit for a property may seem out of reach for many. For example, a 25% deposit on the average house price is now £68,000; more than double the UK average income.
Changes to the mortgage market mean it has become harder to access mortgages, with fewer higher Loan To Value products available and tighter affordability rules.
Real income has become more squeezed; with prices rising faster than income over the past few years, people have had less money to commit both to saving and to thinking about paying a mortgage.
The survey shows that nearly half (46%) of non-homeowners in the key first-time buyer bracket of 25 to 34 years olds did not think property ownership was within their grasp. Meanwhile, adults aged under-25 remain relatively optimistic about their future prospects; with 54% of them both wanting to buy a house in the future and believing that they will be able to do so. Just four per cent of non-homeowners aged over 55 still expect to be able to buy in their lifetimes.
The research certainly makes for sobering reading, but whether it represents a more far-reaching and permanent sea-change within the property market still remains to be seen.