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Homeownership dream “increasingly out of reach”: Santander

Only a quarter of individuals under the age of 34 will get onto the property ladder by 2026, research collected by Santander Mortgages suggests.

Despite this low number, 90 per cent of the same individuals want to be able to get onto the property ladder.

The data collected by Santander shows that 51 per cent of the 5,000 non-homeowners surveyed said owning a home is one of their “top life goals”, higher than having children at 27 per cent or getting married, at 19 per cent.

The bank adds that 70 per cent of potential first-time buyers believe the “dream” of homeownership is already over for many young people, with 64 per cent expecting the number of people on the property ladder to decrease.

Santander believes that those most affected are individuals earning between £20,000 and £30,000, with homeownership rates for individuals earning in between these sums declining from 65 per cent in 1996 to 27 per cent in 2016.

Looking at the biggest barrier to homeownership, the lender cites raising a deposit at 30 per cent. This was followed by getting a mortgage based on their income at 15 per cent.

House price inflation has outstripped wage inflation at 47 per cent to 18 per cent, respectively. Raising student debts and childcare costs have also affected prospective first-time buyers from getting onto the property ladder.

Furthermore, the survey shows that 37 per cent of individuals want the Help to Buy scheme extended beyond 2023, 35 per cent want a cap of rental prices, and 33 per cent want to see stamp duty cuts.

Santander Mortgages managing director Miguel Sard says: “It is clear that while the aspiration to own a home is just as strong as in previous generations, it is a dream that is looking increasingly out of reach.

“Without change, homeownership in the UK is at risk of becoming the preserve of only the wealthiest young buyers over the next decade.

“This report should be a wake-up call for industry and the government to think more creatively to keep the homeownership dream alive for the next generation of first-time buyers.”

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  • John Ahmed 31st July 2019 at 2:15 pm

    The industry needs to think longer term, and educate clients. 40 Year mortgage term for monthly cost also with different lending criteria and flexibility built in to make a property more affordable, combination of low start Interest for a period creeping into full repayment over time, Plenty ideas are there….Industry & Government need to make it happen.

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