The majority of people renting in England believe they will never be able to buy their own home, according to new research. Analysis of the Office for National Statistics' English Housing Service by Castle Trust revealed that 4.5 million (61 per cent) of all private and social renters consider property investment a dream that will never be realised.
Social renters are the least optimistic about their chances of purchasing a home, with three million unconvinced they will ever be in a position to own property. Private renters fare slightly better, with just 1.5 million believing they won't get on the property ladder. Among those that do not envisage buying a home, approximately half think it will be five years or more before they even look to buy.
With so few people able to get on the property ladder, it is unsurprising that owner occupation in England has decreased by 200,000 from 14.6 million in 2008 to 14.4 million in 2012. Simultaneously, the number of private renters in England increased to 3.8 million in 2012. This is a rise of 23 per cent from 2008, when 3.1 million was recorded.
According to Castle Trust, innovative mortgage products must be developed to increase the number of buyers in the UK. This will reinvigorate the sector, increasing the choice of finance options available and creating a more competitive market.
Sean Oldfield, chief executive officer at Castle Trust, said: "Many people are either unable to get on the property ladder or stuck in their current home despite interest rates still being at an all-time low. Schemes like the Government's Funding for Lending are helping to boost borrowing options but the market still needs innovative lending products."
With around 2.8 million owner-occupiers in England having lived in their current home for over 30 years, it is clear that it isn't just first time buyers that are struggling to purchase property. With some homes in negative equity, many are unable to upgrade their house. What's more, rising mortgage rates are deterring many from buying new properties.
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- Wednesday 20 March 2013