UK 'set to become nation of renters'
If you can't get what you want, want what you can get: a new report from the Halifax indicates that young people are increasingly choosing to rent rather than buy.
According to the report, one in five 23 to 27-year-olds say they have no desire to own their own home. For most, this is because they are unwilling to live in a poorer-quality rented home while they save up the deposit to buy.
%VIRTUAL-SkimlinksPromo%Almost half say they believe that Britain will become a nation of renters within the next generation, becoming more like Europe, where renting is the norm.
"With attitudes softening towards the social implications of renting, and the number of people who say they will never own a property increasing, we may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration simply to live in one," says Craig McKinlay, mortgages director at Halifax.
"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."
But while many renters are relaxed about their situation, the survey found that 57 percent of would-be first time buyers would like to save for a property, but say they simply don't have enough cash coming in. The cost of renting a home in the UK is now on average £1,488 a year higher than owning, says the Halifax, making it difficult to save up for a deposit - even with schemes such as the Help to Buy Mortgage Guarantee.
"This is perhaps why we have seen pessimism amongst young people towards their chances of getting on the property ladder, despite the recent widespread changes from mortgage lenders and the government to address this," says McKinlay.
In many European countries, lifelong renting is the rule rather than the exception. In Germany, for example, only 43 percent of people own their own home. However, renting is a great deal more attractive there, as the country has far stronger legal protections for tenants than the UK.
A move towards less home ownership would have significant implications for the economy - and for people's individual financial prospects, with many currently depending on property to fund their retirement.
Any shift back to home ownership is likely to depend on an increased supply of housing, preventing prices from rocketing still further.
"If an increased supply of housing keeps prices stable and any economic recovery is felt, in real terms, by those for whom home ownership is currently out of reach, then we may see levels of home ownership start to 'catch-up' with those of previous generations," says Alun Humphrey, research director of the National Centre for Social Research, which carried out the survey for the Halifax.