The English Housing Survey reveals that 48% of all households aged between 25 and 34 rented privately in 2013/14, a figure that has more than doubled from 21% in 2003/04.
This helps to explain why Prime Minister David Cameron has pledged to offer the 200,000 starter homes that will be built each year to first-time buyers under the age of 40.
The Conservative Party leader has stated that eligible people would be able to register to buy a new-build home with a discount of up to 20% from the normal price, which could provide thousands of young people with the financial step-up that they need to get on to the property ladder.
Can Help to Buy really help?
The government’s plan falls in line with the current Help to Buy scheme that has already helped thousands of buyers across the UK.
The scheme was created to address the underlying issue that while many people can afford their monthly mortgage payments, they simply cannot save up enough money for the required deposit, which is often 10-15% of the total house price.
In fact, 57% of people who do not currently own their own property claim that the size of the deposit deters them from owning their own home, according to the Generation Rent report conducted by Halifax.
But while the Help to Buy scheme is certainly moving in the right direction, it does not solve the housing crisis that many hard-working families face. For many people, working full-time and earning an average salary is simply not enough to save up for a 5% deposit.
The Generation Rent report also revealed that 53% of people claimed that low income was a barrier to homeownership. A further 56% of people stated that high property prices also made owning their own property difficult.
Despite the introduction of government schemes like Help to Buy, first-time buyers are still cautious about applying for a mortgage. The Generation Rent survey also revealed…
- 69% of people aged 20 to 45 didn’t want to go through the process of applying for a mortgage
- 65% were reluctant to apply for a mortgage for fear that they may be turned down, a figure which has increased by 10% since 2011
First-time buyers are crucial for a healthy housing market, but numbers will continue to decline unless the government provides greater help for them. The type of help most requested is increasing the number of loans available to put towards a deposit, building a greater number of new houses and providing access to impartial financial advice. A combination of these things will lead to a more prosperous housing market for everyone.
Siobhan Clarke is the marketing manager for Boxes2Move, a leading provider of premium, durable moving boxes.