Only one in seven adults not currently on the property ladder believes they will buy a home before they are 30.
Of those still planning to buy their first home, 53% intend to raise their deposit through savings accounts – despite the poor returns. Around 12% will borrow from parents; 5% intend to ask their grandparents for money and 9% are waiting to receive an inheritance. One in four don’t know how they will raise their deposits.
Sean Oldfield, Chief Executive Office at Castle Trust said:
“The biggest challenge facing those who want to buy a home in the future is finding a way to save a deposit which keeps pace with rising house prices. The savings market is offering desperately low returns – even the best products struggle to get above 2% - and that is before tax is deducted. The Halifax House Price Index, by contrast, has risen by 7.8% during the last 12 months alone. Independent research indicates that 1 in 5 would be interested in saving for a deposit with an investment linked to house prices, if such a product existed.“
Of those people aged 18 - 24 who are not yet on the property ladder, Castle Trust’s research reveals that 40% expect to have to wait until they are 31 or older before they do this. Among those aged 25 – 34, around 11% expect to have to wait until they are over 40. Sadly, for those people aged between 35 and 44 who don’t already own their own home, 33% (1.2 million) think they have missed out permanently.
Over half of those struggling to get on to the property ladder cited raising a deposit as the key reason (53%). 38% said it was because they don’t earn enough whilst a further 21% said that they would not be able keep up with their mortgage payments. 20% said they are prevented from buying their own home because their credit rating is not good enough to qualify for a mortgage.
Sean Oldfield continues:
“The failure of the young to break into the housing market has some very serious social implications. Older generations know this and want to help - many have the resources to do so. Castle Trust offer a range of solutions to address this crucial issue.”
