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