Homeownership in the UK is increasingly seen as an elite privilege, with research from Yorkshire Building Society showing 78% of first-time buyers and 73% of remortgagers expressing this sentiment. Moreover, 61% of first-time buyers and 54% of remortgagers believe that within five years, the UK is at risk of becoming a nation predominantly of renters.
This perception of the housing market has been shaped by a combination of factors, including a rise in the cost of living, record high house prices, and interest rates not witnessed for nearly two decades. Yet, the desire to own a home remains undiminished.
Despite the challenges, 37% of first-time buyers aspire to purchase a property within the next year, with motivations ranging from ceasing to waste money on rent, creating a personal space, or viewing property as an investment.
Ben Merritt, director of mortgages at Yorkshire Building Society, said: “The reality is that family structures are changing due to things like greater life expectancy prompting a rise in multigenerational living. More people are working for themselves, or employed as contractors, meaning they have unstructured incomes; while factors like the shift to hybrid working following the global pandemic are changing what they want from a home, and therefore their borrowing needs.”
He added: “As a mutual building society, this means we have come full circle, and are stepping in to provide outside-the-box solutions – just as we were set up to do back in 1864. We’ll continue to rise to the modern-day challenges by innovating to offer today’s borrowers suitable pathways to home ownership.”
The research also highlighted the lengths to which consumers are going to overcome financial challenges. Significant changes in lifestyle choices are being made to prioritise property investments. Such sacrifices include forgoing holidays, eating out less frequently, and curtailing tech purchases. Moreover, 94% of the first-time buyers surveyed were actively saving for a deposit, with the expectation that it would take an average of four-and-a-half years.
Despite the challenges, many landlords remain committed to the sector. 66% of surveyed landlords intend to continue their operations for at least another five years. However, they also feel that the government should provide more support, especially given the regulatory and taxation changes that are affecting their profitability.
The report concludes with several recommendations, among which is the introduction of a more targeted Help to Buy scheme for first-time buyers, encompassing all types of properties, not just new builds.
