A report commissioned by Halifax and produced by the National Centre for Social Research (NatCen) has identified that 64 per cent of non-homeowners believe that they have no prospect of buying a home, indicating an emergence of what they are calling ‘Generation Rent’.
Based on the report if ‘Generation Rent’ becomes reality the impact on the housing market could be huge.
The survey was carried out on 8000 people aged between 20 and 45 with a staggering 95 per cent saying that, because of the tough lending criteria and the size of the deposit required, they have no spare cash and zero interest in saving a deposit or were failing to save, despite trying. That leaves only 5 per cent who are actually making sacrifices in order to save the deposit required.
Commercial Director at Halifax Mortgage, Stephen Noakes, commented:
“Our research indicates just how many potential first time buyers are not making it to the application stage because of a fear of being declined”.
The report shows that there is a huge amount of pessimism surrounding lenders and the mortgage application process:
– 84% say first time buyers are put off by a belief that banks do not want to lend to them and find excuses to turn them down
– 92% see it as hard for first time buyers to get a mortgage, with 60% seeing it as very hard or virtually impossible
– 67% believe there is a general perception that everyone is rejected by lenders so there is little point in applying
– 61% say that first time buyers do not want to go through the stress and anxiety of applying for a mortgage
Halifax are, as a direct result of the results of the survey, launching its First Time Buyer Pledge, a set of commitments to first time buyers which will provide ‘Generation Rent’ with better information about the mortgage application process and will detail what they can expect from the lender.
Stephen Noakes continues:
“Of course, not everyone wants to get on the housing ladder. However, 77 per cent of people in our research expressed a real desire to own their own home, but for two-thirds of non-homeowners it’s an impossible aim”.
Halifax’s First Time Buyer Pledge states that they will:
– publish details of the criteria upon which your application is assessed
– provide a personalised promise on how much we can lend you, without leaving a lasting record on your credit profile
– provide an action plan for you to move forward, whether your application is successful or not
– help you to understand the reasons why, if your application is not successful
Halifax say that they are also producing a new guide to the application process that will show potential first time buyers what is looked at when an application is assessed and how they can improve their chances of being successful.
What do you think — is this enough to gain the confidence of first time buyers?
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