Tenants face becoming ‘lifetime renters’

Around 2.2 million would-be first-time buyers have been locked out of the property market since 2006, research reveals.

According to the Building Societies Association (BSA), there’s a growing crisis for renters, particularly those aged 25-44.

The BSA found that 59% of those tenants said they expected to own a home by now but remain stuck in rented accommodation.

Its latest Property Tracker survey paints a bleak picture of a housing market where aspirations are increasingly out of reach.

Growing numbers of ‘lifetime renters’

The BSA’s head of mortgage and housing policy, Paul Broadhead, said: “Our studies into first-time buyers show that they face the toughest conditions in over 70 years.

“That comes into sharp focus when you see the statistics of the number of people in rented accommodation who have been unable to achieve their dream of homeownership in line with their life plan.”

He added: “It’s shocking that 2.2 million first-time buyers who would have reasonably expected to buy their own home have failed to do so since the financial crisis.

“And the research shows how quickly that number is growing – in 2020 only 12% of 18-24 year olds felt homeownership was out of reach, today that figure has increased to 19%.

“Every day that passes without real action raises the number of potential lifetime renters.”

Never afford a home

The BSA also says a third (33%) of renters aged 25-44 fear they may never afford a home, and only 31% believe they will own a home within the next five years.

The desire to own remains strong, with just 8% of renters aged 25-44 expressing no interest in buying, down from 15% five years ago.

Since the 2006 financial crisis, the BSA estimates that 7.2 million individuals or couples should have entered the housing market as first-time buyers.

Yet only 5 million have succeeded, leaving a significant gap of 2.2 million ‘missing’ buyers.

This shortfall underscores the mounting barriers to homeownership, the organisation says.

Struggle to save

The biggest obstacle, cited by 67% of first-time buyers, is saving for a deposit.

Mortgage affordability is a close second, with 61% struggling to meet monthly payments.

Nearly half (48%) also find it difficult to secure a large enough mortgage.

Job insecurity is an emerging concern, with 26% now stating it is a barrier, up from 19% in June 2023, reflecting rising unemployment and fewer job vacancies.

Low confidence in the market

The survey also found that confidence in the housing market is at a low ebb, with only 15% of the population believing now is a good time to buy, down from 20% in January.

Despite stable house prices, 44% expect them to rise over the next year, while just 12% predict a decline.

Younger renters, aged 18-24, show both ambition and worries.

While 86% aspire to own a home, and 28% are hopeful of achieving this within five years, 19% doubt they will ever afford it — a sharp rise from 12% five years ago.

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