Under 45s see the UK becoming a nation or renters rather than property owners, research shows

Half of 20 to 45 year olds think that Britain will become a nation of renters within a generation, according to new research conducted by Halifax, the UK's largest first time buyer lender, shows.

It found that just 14% of non home owners between 20 and 45 years old are actively saving for a deposit and 24% of parents have had their children move back home as adults due to the current market.

‘Our research shows that one year on, young people are still downbeat about their chances of owning a home, and we're also seeing the impact this has on their parents' financial future. Parents think that their kids could make cutbacks on holidays and going out in order to save for a deposit. However, despite concern for their own financial future, parents continue to stump up a contribution or welcome their children back to the nest to allow them to save,’ said Stephen Noakes, mortgage director at Halifax.

Two in five, 40%, would like to buy a home but do not believe they will ever be able to Just 31% have a serious intention to buy within the next five years and 50% believe Britain will become a nation of renters within a generation, an increase of 4% since the 2011 survey.

The size of a deposit, high house prices and job security are the top three barriers to home ownership. In addition, 91% of parents believe that the current UK economy is discouraging first time buyers from buying a property, in line with 87% of 20 to 45 year olds who fear that it is a risk to buy a home in today's economy.

Whilst the average FTB deposit in today's market stands at £24,647, the research found that 26% have savings of less than £3,000 and 35% have no savings at all. However, 80% admitted to spending money they could otherwise be saving for a deposit.

Nearly a quarter, 23%, of 20 to 45 year olds are relying on money borrowed from friends and family to get on the property ladder compared to 11% of their parents' generation. However, just 8% of parents feel that 20 to 45 year olds should be borrowing money for this purpose. Some 79% of parents believe the younger generation should instead go on fewer or cheaper holidays and 77% say the younger generation should cut down on going out in order to save for a deposit.

Over a third, 38% of parents have made financial contributions to help their offspring get on the property ladder. The total amount of money family members are giving or lending to children has been estimated to have increased by 31% to an average of £12,846 in the past five years.

Some 26% have already contributed to a deposit and a further 19% expect to do in the future And 31% of parents are dipping into their savings and14% have given their child some or all of their inheritance early. Also 6% contribute to monthly mortgage payments or expect to do so in the future and 24% of parents have revealed that their children have at some point moved back in with them as a result of not being able to buy their own property.

The research also shows that parents are even more pessimistic than their children about the mortgage application process, with 66% and 60% respectively believing that it's very hard or virtually impossible to get a mortgage. However, just 39% of parents think that this puts people off from applying, compared to 61% of 20 to 45 year olds.

Nearly three in five, 59% of potential home owners believe that lenders accept less than 40% of mortgage applications.
‘Despite the launch of various initiatives to support first time buyers such as NewBuy, both young people and their parents share a view that it is difficult, or even impossible, for first time buyers to get a mortgage, which this is clearly a point we need to continue to address. The reality is we continue to approve eight out of 10 first time buyer applications, more than double the amount that people expect us to,’ explained Noakes.