36% downbeat about home ownership
The British love affair with home ownership is showing signs of cooling as many young people remain downbeat about their prospects of getting on the property ladder, a report has found.
Halifax's "generation rent" report found that despite the launch of schemes like Help to Buy to give a boost to people with small deposits, the proportion of 20 to 45-year-olds who have no realistic prospect of owning their home in the next five years has remained broadly unchanged from previous years, at 36%.
Almost one in five (18%) people aged 23 to 27 said they have no desire to own their own home.
The report warned that any future collapse in the number of first-time buyers, which are seen as the "life blood" of the housing market, will have a knock-on impact on people trying to move up the property ladder.
If some existing home owners are unable to trade up because of a lack of potential buyers for their property, the market will be brought to a "standstill", the report said.
The findings come after figures released by the Office for National Statistics (ONS) earlier this week showed someone trying to get on the property ladder faces paying 10.5% more for a property than they would have done a year ago, with the typical price paid by first-time buyers reaching £192,000 in February.
The ONS figures have fuelled concerns about "runaway train" house prices, with property values across the UK having leapt by 9.1% over the last year to reach a new average high of £253,000.
The Halifax report found almost half (48%) of people agree that Britain will become a nation of renters within the next generation and 46% think the country is becoming more like other parts of Europe, where long-term renting is seen as the norm.
On average, people who do not own their own home told the report they would be prepared to save up for a deposit to buy a property for around five-and-a-quarter years, edging down from nearly five-and-a-half years when the same question was asked in 2013.
Around three in 10 people aged between 20 and 45 think Government housing market initiatives are working, according to the findings, but the same proportion believe they are not and the remaining four in 10 do not know.
Some experts have said the Help to Buy scheme is partly to blame for house prices being pushed towards unaffordable levels.
Help to Buy, which was fully launched into action at the end of last year, is designed to offer people with a deposit as low as 5% a helping hand on to or up the property ladder.
But critics have argued that it is adding to the upward pressure on house prices by ramping up demand from would-be buyers in areas where the supply of homes coming to market is failing to keep up. The Government has said that a series of initiatives are helping to boost the supply of homes for potential buyers to choose from.
Toughened mortgage lending rules are also set to come in later this month, which will see mortgage applicants being asked more probing questions about their spending habits, in order to make sure people can only take out home loans they can comfortably afford to pay back, even if interest rates rise.
Despite Help to Buy, the findings showed there is still a heavy reliance on the "bank of mum and dad", with six in 10 20 to 45-year-olds agreeing that support from family members is now automatically assumed as a vital part of helping people on to the property ladder.
Craig McKinlay, mortgages director at Halifax, said: "We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one.
"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."
The report also found fewer people agree that renting means they cannot fully settle in an area, dropping from 58% in 2013 to 54% this year.
The proportion of people who do not want to raise children in a rented property has also dropped, from 44% last year to 40%.
Some 51% of people who do not own a home are worried about the impact that continuous renting could have on their retirement, although this is also down from 57% a year ago.
The annual report, which has been running for four years, contains data from over 32,000 20 to 45-year-olds and 3,000 parents with children aged between 20 and 45 from across the UK.
Housing Minister Kris Hopkins said: "Anyone who works hard and wants to get on the property ladder should get the help they need to do so.
"That's why we've launched the Help to Buy schemes, which enable people to buy with a fraction of the deposit they would normally require, and have to date helped nearly 20,000 people do just that."
He continued: "We're also getting the country building again - leading developers have said they'll build more as a direct result of schemes like Help to Buy, and since 2010 we've delivered 420,000 new homes, including 170,000 affordable homes."