To buy or not to buy? That is the question...
It’s one of the major financial decisions. But will future choices be limited, asks MyMoney24’s ED FOSS.
BUYING your own home for many people has just seemed to be the right thing to do, a step up from ‘simply’ renting.
But how many of us actually think hard about why we want to buy?
So many other countries have an overwhelming culture of rental - have they got it right while we have got it wrong?
It may be that the choice between renting and buying is one which will be increasingly removed from people in the future, despite their preference.
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A new piece of work out this week suggests that is certainly the case.
It says that the credit crunch has created ‘Generation Rent’ in Britain and that half of us think that the country could become a nation of renters within a generation.
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Although three quarters of all non-homeowners still aspire to owning their own home, nearly half of 20 to 45 year olds say Britain is becoming more like Europe where renting is seen as the norm.
Commissioned by Halifax and produced by the National Centre for Social Research, the report found that two thirds of non-homeowners believe they have no prospect whatsoever of buying a home.
The perception that banks are not lending, the size of mortgage deposits necessary and a fear of the application process has prevented ‘Generation Rent’ from making any significant attempts to buy a home.
Stephen Noakes, commercial director at Halifax Mortgages, said: “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.
“We would like to help aspirational home buyers to realise they do have options, that they can apply for a mortgage, and that it is still possible to get onto the property ladder.”
With fewer homeowners pumping money into the construction industry, the number of new homes would slow. And that could open up a widening of the wealth gap that already exists between home-owners and non home-owners.
It could also add to the current concerns about people not being adequately financially prepared for retirement.