A huge 86% of the population would prefer to buy their own home, given the choice, but many will never succeed in their ambition, according to David Willets, executive chair of the Resolution Foundation.

In an article written for the Council of Mortgage Lenders, he said that owning clearly has many advantages – offering the welcome prospect of security of tenure, as well as an opportunity to build up wealth over time.

But he admitted that while homeownership is a widely held ambition, it is one that has proven increasingly hard to realise in recent years.

Willets noted that in 2002, 70% of working age households owned their own homes, but the figure has dropped to just 58% today (and it is worth noting that a growing proportion of these households are mortgage-free).

Priced out

Willetts pointed to runaway house prices as the obvious explanation for the fall in homeownership. He cited new research released by the Resolution Foundation showing that, since the early 2000s, house price increases have rapidly outstripped earnings growth by close to a factor of five, opening up a significant gap between the two, and creating a housing affordability crisis.

First-time buyers face much higher barriers to entry: in the late 1990s, a low to middle income household saving 5% of their disposable income took three years to save for an average-sized deposit. Today, that stands at 22 years.

Younger people today are significantly less likely to buy a home than previous generations at the same age. In the early 2000s, around 35% of households headed by a 25-year-old owned; 15 years later, that stands at below 20%. And they are not catching up later in life: close to 65% of households headed by a 30-year-old owned in the early 2000s, down to below 45% today.

Willets admitted that many younger Brits are resigned to renting forever. He said: “The latest Bank of England NMG survey shows that 46% of non home-owners now never expect to buy. When asked to explain why, the number one reason respondents cited was the barrier presented by deposits and other purchase costs.

“Even if younger households find ways to overcome the deposit hurdle (buying as a couple or as a group of friends, for example, or ‘borrowing’ from the bank of mum and dad) they face other obstacles. A third of non-owners are put off purchasing by the amount of mortgage debt they need to take on, while a similar number say lack of access to credit puts paid to their home-owning dream.”