"We need to ensure that those feeling the economic effects of this unprecedented crisis still have an opportunity to find a home of their own in the future."
More than a quarter (28%) of renters who have had to push back their plans to buy say the virus has caused a fall in their income which has made buying less likely, while 27% have had to dip into funds that could have been used to help them buy a home of their own. The research also revealed that a tightening of lending criteria had impacted the ability of renters to buy too though, with 29% saying that stricter lending requirements had it much harder to find a mortgage.
Even before the crisis, 18% of renters say they struggled to find a lender that was willing to give them a mortgage. Two in every five (40%) people locked into Generation Rent also say that the biggest barrier to owning a home is being able to save a large enough deposit.
Anth Mooney, CEO of Vida, commented: “Generation Rent has been hit hard by the pandemic. While some younger buyers are lucky enough to get help from the Bank of Mum and Dad, millions of individuals underserved by the mortgage market are stuck in a cycle of renting. Finances have been hit by furlough and/or sudden loss of income or job security.
“This is not a problem which just affects young people. From the over-55s who have always aspired to own their own home to the key workers – the nurses, the social workers and the supermarket delivery drivers that are putting themselves at risk to keep us safe during this pandemic – Generation Rent spans all of the ages. At Vida, we think that those people who want to buy should have a fair opportunity to find a safe place to call a home of their own.
“Solving the challenge posed by Generation Rent is not impossible. It requires us to roll up our sleeves and work together – government, the housing sector and the mortgage market - to provide solutions for consumers who have been underserved and overlooked for too long. We need to innovate new mortgage options that provide a real solution for those stuck in Generation Rent, and we need to ensure that those feeling the economic effects of this unprecedented crisis still have an opportunity to find a home of their own in the future. This is our ambition at Vida and we are listening to consumers and our colleagues in the mortgage market with a plan to innovate and deliver for Britain’s underserved borrowers, so that everyone in our society has a real chance of finding a safe place to call home.”
Andrew Montlake, managing director of Coreco Mortgage Brokers, added: “Generation Rent from Vida is a great piece of research which really brings home the issues that many prospective homeowners now face when trying to get onto the property ladder in the current climate. It is challenging at the best of times to purchase a home with house prices having risen, fuelled by pent-up demand and the stamp duty holiday, whilst higher rents and increases in the cost of living make saving for a deposit trickier. The concern is that the gap between the haves, those that are lucky enough to have larger savings pots or assistance from parents and family, and the have-nots is getting wider and wider. We need a concerted effort from government, the housing industry and the mortgage market to ensure that we do not have a lost generation of prospective homeowners.”
