Our latest research shows that Britain’s drive to become a ‘nation of homeowners’ may be fading. From Thatcher’s Right-to-Buy scheme to George Osborne’s Help-to-Buy and mortgage credit expansion, homeownership was a rhetorical device now firmly embedded as a national value, but one showing signs of decline. In our analysis of a survey of over 8,000 20-45-year-olds and 1,000 parents of 20-45-year-olds, exploring “Generation Rent”, we found that younger generations are significantly less likely to want to own a home than their predecessors.
Of those surveyed, almost half already owned a home, 1 in 5 were likely to soon become first-time buyers, a further 1 in 5 would like to own but didn’t have the means, and the rest said that they didn’t want to buy.
However, there is a marked contrast between different age groups; 13% of those aged 28-42 had no interest in owning a home, in comparison to 18% of those aged 23-27. If this youngest cohort, whose views of the UK economy have been formed during a time of recession and housing market instability, continue to be less willing to own a home as they age (as they have done over the past 4 waves of the survey) this may mark a step change in attitudes to property in Britain.
This is not to say that property ownership does not feature at all in the psyche of Britain’s youth – a significant majority still want to own a home. However, even among those that want to buy there seems to be a polarisation between those who think that they won’t ever be able to buy, and those who see it as a realistic prospect.
Today’s 20-45-year-old non-homeowners are making bigger sacrifices to get onto the property ladder than previous generations: 69% of those who would like to buy were cutting back on their spending to save for a deposit, compared to the 56% of those who have already bought and 54% of homeowners from their parents’ generation who cut back when saving for their first home. The only thing that generation rent’s parents were more likely to have done was take a second job – something that may be hard to do in the current climate.
And yet this doesn’t seem to be enough; 57% of non-homeowners who would like to buy said they do not have spare cash to save for a deposit. Many need external help, typically from the ‘bank of mum and dad’. Shelter estimates that parents in the UK contribute around £2 billion per year to first-time buyers’ deposits and six in ten 20-45-year-olds agreed that “parents are now expected to help young people buy their first home”. Potentially, this further entrenches differences between the relatively well-off for whom buying a home is an option, albeit with parental help, and those from worse-off families for whom it is simply unimaginable.
If this is the case, there is a danger of becoming not one nation of homeowners, but two nations: one of homeowners, and one of renters. So what does the public think about this?
Over two-thirds of all 20-45-year-olds agreed the country is in danger of dividing into those who can afford a home and those that will never be able to, and over half agreed that this will create long-term social problems. Perhaps unsurprisingly, those who already own a home or are likely to in the next few years were far less likely to be concerned about these possible long-term impacts than the non-homeowners who would like to own but feel unable.
Of course, we’ll need to keep watching to say categorically whether young Brits’ attitudes really are different to those before them, but it’s certainly an interesting idea. And while there seems to be an emergent group of those who are quite content to be a part of ‘generation rent’ or, at least, indifferent to ownership, most non-homeowners would still prefer to move out of ‘generation rent’. Whether they’ll have a choice in the matter is another question entirely.
Read 'The Reality of Generation Rent' here.