Saving for deposit remains the main barrier to home ownership
Wednesday 7th May 2014
Saving for a deposit was cited as the key obstacle to owning a property by 81% of British adults recently surveyed by Genworth as part of the latest Genworth Index.
For the key 25-34 year old demographic, the figure rises to 83% - further evidence as to why the average of the First Time Buyer continues to increase. What’s more, 83% of those surveyed within this age bracket believe they would need to borrow money from parents or family in order to finance a deposit for their first steps on the property ladder.
British households also anticipate that house prices are only going in one direction – up – with 72% braced for further increases in the next two years.
Unsurprisingly, Londoners see the greatest need for an increased supply of properties with 68% agreeing that more houses need to be built in the UK – significantly higher than the national average of 56%.
The report shows that Great Britain has twice as many financially vulnerable households as those classed as financially secure, however it continues to outperform its traditional European economic neighbours.
Simon Crone, Vice-President of Mortgage Insurance Europe at Genworth Financial, said: “With the ongoing increase in house prices and incomes failing to keep pace, it is not surprising that the vast majority of British adults believe saving for a deposit remains the single biggest barrier to buying a property.
“Standard of living costs have also risen considerably in the past few years and saving continues to be difficult for many. With most British households anticipating that house prices are going to continue to rise while wage levels will not, the difficulties households face in saving for a deposit are not going to go away.
“Our Index reveals a growing expectation from both children and parents themselves that they will be required to help ‘fill the gap’ when it comes to their offspring’s savings and the level of deposit required. The Bank of Mum and Dad is now an institution which is increasingly called upon and has become a permanent fixture of the British housing market – but with many households financially vulnerable, not everyone has the luxury of this parental support.
“It’s clear therefore that we need to continue to build more homes and ensure we have a growing supply of low-deposit mortgages available in order to lessen the deposit burden for those who want to get on the property ladder,” he added.
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