The attitude of young people towards renting is changing as many find themselves priced out of the property market, a study showed today.
There has been a marked shift in the opinions of 20 to 45 year olds towards homeownership, with many now accepting that renting enables them to live in a property they would either not be able to afford to buy or would have to make years’ of sacrifices to do so, according to Halifax.
The trend represents a marked shift from when the research was first carried out in 2011, when young people wanted to buy a home, but either could not afford to do so or dared not try to for fear of being rejected by mortgage lenders.
But the latest research found that one in five 23 to 27 year olds claim they have no desire to own a home, while 46 per cent think Britain is becoming more like Europe, where renting is the norm.
Young people are also increasingly unwilling to make the sacrifices necessary to get on to the property ladder.
The study found that 86 per cent of potential homeowners refused to sacrifice the quality of accommodation they currently lived in to help them save more towards a deposit.
At the same time, 54 per cent were not prepared to make other sacrifices to get on to the property ladder, and 57 per cent would not compromise on the quality of the first home they bought.
Craig McKinlay, mortgages director at Halifax, said: “With attitudes softening towards the social implications of renting, and the number of people who say they will never own a property increasing, we may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration simply to live in one.
“It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people.”
But 40 per cent of people still said they did not want to raise children in a rented property, and 51 per cent worried that renting would have a negative impact on their retirement, although both figures were lower than last year.
Halifax also pointed out that the average cost of renting a home in the UK was now £1,488 a year more than owning one.
It added that the availability of 95 per cent mortgages had increased significantly during the past year, while schemes such as the Government’s Help to Buy should make it easier for people to get on to the property ladder.
Mr McKinlay said: “Researching the market and accessing the support that is available for first-time buyers could make a real difference in realising the dream of owning your own home.”
The Office for National Statistics also recently reported that house prices in the UK had reached a new record high.
Halifax questioned 8,026 20 to 45 year olds and 1,005 parents online between February 14 and 23.
One in five buyers paid more than the asking price in March as competition for properties intensified, figures showed today.
The average number of properties estate agents had on their books fell for the sixth consecutive month during March to stand close to a 10-year low, the National Association of Estate Agents said.
But the shortage of stock did not stop the number of sales agreed per branch rising to an average of 10 during the month.
The combination of limited supply and fierce competition among buyers led to 19 per cent of properties selling for more than their asking price.
Jan Hÿtch, president of National Association of Estate Agents, said:“The supply crisis continues to deepen, and the Government must act now to offer house hunters hope in an increasingly congested market.
“Current conditions mean that in just a few months we’ve seen a large increase in the amount of people willing to offer over market price to secure homes.”
But buyers can still find properties with reduced prices if they do their research.
Here are some properties with reduced asking prices:
1. Six bedroom detached period stone farmhouse in Skipton reduced from £735,000 to £675,000.
2. Seven bedroom detached house in Brentwood reduced from £885,000 for £835,000
3. Six bedroom detached house in Plymouth reduced from £2,500,000 to £2m.
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Total mortgage advances have soared by a third during March as the market continues to recover, figures showed today.
A total of £15.4bn was advanced during the month, 4 per cent more than in February and 33 per cent above the level seen in March 2013, the Council of Mortgage Lenders said.
Lending during the first quarter was also significantly ahead of a year earlier, with an estimated £46.3bn advanced in the three months to the end of March, 37 per cent upon the same period of 2013.
But the figure was 10 per cent below advances for the fourth quarter of last year, when lending levels were particularly high.
Bob Pannell, chief economist at the CML, said: “Alongside benign developments in the wider UK economy and the labour market, housing market sentiment continues to strengthen.”
But he added that while the trend for strong year-on-year growth was continuing, the underlying profile appeared to be a “little gentler than in recent months”.
Signs of a slight slowdown in lending levels are likely to calm speculation that a bubble could be developing in the property market.
The Office for National Statistics also recently reported that house prices in the UK had reached a new record high, with growth in London soaring by 17.7 per cent during the year to the end of February, while across the UK as a whole prices rose by 9.1 per cent.
But Bank of England figures showed the number of mortgages approved for house purchase actually dipped slightly during February, suggesting demand for property may be easing slightly.
Meanwhile, the CML said lenders appeared to be ready for the implementation of new lending rules on April 26, which will see tougher affordability criteria applied to borrowers.
Mr Pannell said: “There are currently no signs of significant market disruption, arising from the imminent application of new lending rules associated with the Mortgage Market Review.
“While some mortgage lending indicators have eased back gently, this is from the very high levels of recent months.”
But he added that glitches could not be ruled out and some lenders may suffer from demand running ahead of their ability to process applicants in the short term.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lending market continues to strengthen as a result of the combination of cheap finance and lenders with a real appetite to lend.
“With the economic recovery continuing apace – unemployment falling, wages rising and inflation edging off further – the markets are anticipating an early interest rate rise.”
But he added that Bank of England Governor Mark Carney had repeatedly played down expectations of an early rate rise, and any hike in the official cost of borrowing could be delayed until next year or after the General Election.
With its detached gym, decked terrace with hot tub and a Hollywood style vanity area in the bedroom, this spruced up bungalow is fitting of anyone in the entertainment industry.
The three bedroom property is understood to have once been the home of singer and television personality Alesha Dixon, who lived there for two years.
In the popular location of Welwyn Garden City – where Alesha grew up – the house is now on the market for £1.150,000
Dixon reappeared on our screens last weekend as a judge on Britain’s Got Talent, alongside Simon Cowell, Amanda Holden and David Walliams.
She first found fame as part of the all-female band Mis-Teeq, before later appearing as a contestant – and then judge – on Strictly Come Dancing.
The Hertfordshire property is named Rosewood and has been extensively refurbished, boasting high gloss white cabinets with stricking glass splash backs, an inset television overlooking a sunken style bath and a Japanese garden.