Published June 16, 2013
LONDON – Most young Britons say rising barriers to home ownership are dividing the country socially and economically, and one in five has abandoned the dream of ever owning a property, a survey by mortgage provider Halifax said.
Over 70 percent of 8,051 survey respondents said the country was being split between those who could and those who couldn't buy a home, which in the long run could impact neighborhoods, families and the job market, the Lloyds Banking Group-owned lender said on Monday.
The respondents, aged between 25 and 40, said the effects included leaving their generation without sufficient resources for retirement, affecting social mobility and widening the country's wealth gap.
House prices rose steeply in Britain from the late 1990s until the global financial crisis broke in 2008, and they have been kept high by a combination of factors, including historically low interest rates and shared ownership schemes.
"Home ownership is clearly still an important goal for a lot of people, but fewer and fewer people consider it to be something they'll be able to achieve," said Halifax's Mortgages Director, Craig McKinlay.
"Renters say they never feel properly settled and fear they will struggle to retire, so the social impact of this shift is significant. More needs to be done to redress the balance, both through making homeownership more accessible and offering more stability through the rental sector."
The number of Britons renting privately is at its highest level since the 1990s at 22 million households, the survey said, with many unable to afford to buy a home due to the chunky deposits needed, a lack of mortgage loans and stagnant incomes.
Thirty-six percent of respondents said that they would like to buy a home but did not think they would ever be able to, the survey said.
Halifax also said that 70 percent of respondents did not believe, or were unsure that government plans to support homebuyers would help the market. In March, finance minister George Osborne announced plans to provide and guarantee billion of pounds in housing loans, which critics say could drive property prices higher still.
Housing Minister Mark Prisk said there had been 4,000 reservations under the guarantee scheme and urged others looking to buy a home to participate.
(Reporting by Brenda Goh; Editing by John Stonestreet)