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People still aspire to home ownership but many feel current financial barriers are too great

While mortgages feature, other issues were more widely seen as hurdles, which suggests that improving the state of the housing market may not be straightforward, according to the Council of Mortgage Lenders which commissioned the research from YouGov.

The findings suggest that 79% of British adults would like to be home owners in 10 years’ time. While from any objective standpoint this remains a very high figure, it is down slightly from 81% a year ago, and actually one of the lowest levels recorded over the past 30 years.
 
‘We would nevertheless characterise the desire for home ownership as resilient, when viewed against the backdrop of protracted economic difficulties and a sharp decline in actual ownership rates,’ the CML said.

Behind the finding, however, there appears to be a divergence in aspiration trends across different age groups. All age groups continue to show a strong preference for home ownership in the longer term, but there has been an appreciable drop amongst younger age groups over the past few years.By contrast, those of retirement age appear to value home ownership more highly than ever before.

The majority of private sector tenants, some 64%, aspire to become home owners as do 70% of sharing with parents, other relatives or friends. Both percentages are lower than a year ago when they were 76% and 78% respectively.

Overall, about 44% of respondents would ideally like to buy a new home during the next two to three years. Those renting privately or sharing with parents, other relatives or friends, and 25 to 34 year olds show the strongest appetite to buy.
When asked whether they actually expect to be in a position to buy a new home within the next two to three years, a little over a third of the 44% who would ideally like to move think that it is likely that they will do so. This means that about 16% of all respondents would like to buy during the next two to three years and believe that it is likely to happen.

The survey found that existing home owners are more confident  about buying a new home than those renting privately or sharing with relatives or friends, yet these in turn feel much better placed than those currently in social housing.
Some 30% of home owners feel it is likely that they will be able to buy in the next two to three years, compared to 21% of private renters, 20% of those living with friends or relatives, or 8% of social renters.

Those aged 25 to 34 are more confident about buying a new home than other age groups, although most of the difference is in those seeing this as fairly likely (24%) rather than very likely (10%). The CML said that some of this greater confidence may reflect the peer expectations that go with this age cohort being a dominant group for first time buyers.

Respondents selected a wide range of factors that they consider are currently making it more difficult to buy a home including not having enough savings, house prices being too expensive, the cost associated with buying, the cost of living, likelihood of getting a mortgage, mortgage rates being too high and job and economic uncertainty.

When asked what would significantly improve their chances of buying a new home in the next two to three years the majority said a inheritance of pay rise, followed by house prices falling, a cut in stamp duty and lower mortgage rates.

The research suggests that there is significant support, across all tenures and age groups, for the government to make it easier for people needing a large deposit to get a mortgage. The proportion of respondents agreeing that this should be a policy goal at 59% outnumbered those opposing at 14% by more than four to one.

When asked directly, a majority of those surveyed, some 60%, also feel that it is unfair that borrowers who are only able to put down a small deposit have to pay a higher mortgage rate.

Asked what difference it would make if lenders were to offer more low deposit mortgages, few respondents thought that this would make things worse, and 46% thought it would make no difference to their chances of buying a new home in the next two to three years.
 
Some 34% of respondents were more positive and thought that more low deposit mortgages would help them, although most of these, more than 60%, only thought it would make things slightly better.
Understandably, those individuals who saw insufficient savings as constraining their chances of buying a new home were the most positive about more low deposit mortgages, with nearly half of them (47%) believing that it would improve their chances of buying.

Respondents who already thought that they would be able to buy were more optimistic about the likely impact than those currently unable, with 41% of those able to buy in the next two to three years saying more low-deposit mortgages would improve their chances of buying, compared to 33% of those unable to buy.

‘Home ownership clearly remains a very strong aspiration among the British. The recent reduction in appetite is almost certainly tied to the economic and financial difficulties that the UK and many other countries are experiencing,’ the report says.

‘From this perspective, the Chancellor’s Budget measures to support home ownership appear politically well judged. However, individuals face a very diverse range of circumstances, which may be inhibiting their ability to buy their first home or move within the owner occupied sector.

‘While the pricing and availability of mortgages are widely cited as relevant factors, they do not head up people’s list of concerns in aggregate. Many other factors, relating to such issues as the wider economy, the state of the housing market and personal financial circumstances also loom large,’ it points out.

‘This suggests that no single policy action, even one with the £130 billion firepower of the Help to Buy mortgage guarantee scheme, is likely to remove all the obstacles identified as blocking those who wish to buy a home,’ it concludes.

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