You are here: Home - Mortgages - Buy To Let - News -

Owning your own home? ‘Dream on!’ says new data

0
Written by:
16/07/2012
Owning your own home has been elevated to a ‘pipe-dream' status as few renters can afford to save enough for the deposit for a house.

According to new research by SpareRoom.co.uk, around 42% of UK renters can’t afford to put away enough savings for a deposit on a place of their own.

Even those renters who do have money to put aside for a deposit are a long way off achieving their goal. More than a third of renters polled said they are currently saving for a deposit.

However, of those, 42% have saved less than £5,000, while the average deposit saved is £12,125, just 7.3% of the average UK house price of £165,738.

Matt Hutchinson, director of SpareRoom.co.uk, said: “As a nation, we have always aspired to be homeowners at some point in our lives, but how realistic are those aspirations?”

“In truth, home ownership may simply never be attainable for future generations, and peoples’ attitudes towards renting long-term may need to change.

“A significant proportion of the people we polled expect to live in rented accommodation for at least five years, and many believe it will be much longer than that.”

“If attitudes towards home ownership relaxed in the UK, people might even be prepared to rent rather than buy for the long-term, as is the norm in parts of Continental Europe.”

With most lenders requiring at least a 20% deposit, this means that based on the average UK house price of £165,738, a deposit of more than £33,000 is required to even qualify for a mortgage – that’s over £20,000 more than the average renter has managed to save.

Hutchinson continued: “The facts speak for themselves; soaring living costs mean it’s a struggle for many households just to keep their heads above water each month, let alone have enough spare cash to put aside towards a deposit.”

“The survey shows that even those who are squirreling away funds have not managed to save anywhere near enough to buy the property they want.”

As renters are being forced to cover rising bills and increasing rents, deposit funds are being eroded, with 15% admitting to regularly dipping into their savings to cover rent or bills.

While, another 20% have used their savings pot to pay for holidays, with a whopping 60% of under-30s dipping into their savings to cover the costs of living.

Despite Britain traditionally being a nation of aspiring property buyers, the survey reveals that there is a split in opinion on whether staying in rented accommodation is necessarily a bad thing, with almost a half admitting they would be happy to rent long-term if only there was less pressure in the UK to own a home.

This comes as a report from Rightmove showed that house sellers this month cut asking prices by 1.7%, or £4,138, the largest price drop in July for four years.

Rightmove’s July house price index found that sellers have suffered from miserable ‘viewing’ weather and “Olympic distractions”, with the number of would-be sellers outnumbering successful buyers by two to one.

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2191829-peter-dockar
HSBC promises to lend extra £2bn mortgages this year

HSBC has confirmed that it will be making an additional £2bn of mortgage funding available to UK borrowers, with £1bn...

Close