Renting not the answer for a generation which wants to own a home
- 82% of those surveyed keen to get on the housing ladder
- 48% of prospective home buyers plan to take advantage of new Lifetime ISA
- Only 4% feel well informed about government assisted Help to Buy schemes
New research has revealed that owning their own home is still the dream of the vast majority of young people, with 4 out of 5 (82%) of respondents hoping to get on the housing ladder one day and only 1 in 25 (4%) respondents saying they don’t ever want to buy a property. This comes just weeks after the government’s recent housing white paper announced plans to boost the numbers of affordable rental homes on offer and increase the length of tenancies to make renting a more appealing long-term option.
The survey of 2,000 UK 18-40 year olds who have never owned their own home was commissioned by Life Insurance provider Beagle Street to assess the landscape for potential homebuyers, along with their knowledge and understanding of the government support available to them.
One focus of the research is the new Lifetime ISA, which will see the government top up first time buyers’ savings by 25p in £1 up to £4,000 a year. Over half (57%) of respondents said they were ‘very unfamiliar’ with the new scheme, set to be launched on 6 April 2017 – yet when given information about it, many welcomed its introduction. The results indicate that 48% of prospective homebuyers are likely to take advantage of a Lifetime ISA, with 40% of those who hope to buy one day saying they were more likely to buy a home once it is introduced, including 16% who said they were likely to buy sooner than they would have done without it.
Encouragingly, two thirds (64%) of prospective first time buyers are already taking advantage of existing ISAs and savings accounts, with half (50%) typically paying in every month, and a further 10% paying in weekly or fortnightly. Over a quarter of savers among potential homebuyers (28%) have saved over £5,000, while more than one in three (35%) of those who are in the process of buying a home have saved over £10,000.
Yet many would-be homebuyers are failing to access information on the government schemes available to them, including Help to Buy, Right to Buy, Shared Ownership and other government-assisted savings options. Just one in 25 prospective homebuyers (4%) surveyed feel well informed about the government’s policies for first time buyers, while over two thirds (64%) of those polled either know nothing about them or would need significantly more information to form a decent understanding.
The reasons for the lack of understanding are varied. Among prospective homebuyers:
- 67% said the government’s policies seem to change so often it’s difficult to know what the latest government-assisted options are
- 63% said information hasn’t been well publicised
- 52% said there’s a lot of jargon and it’s difficult to understand
The survey findings indicate that many young people have the potential to buy their own home, but lack information on the various parts of the buying process, from accumulating a deposit, to taking advantage of a Government scheme and understanding how the purchase process works.
The research coincides with the launch of Beagle Street’s comprehensive Home Buyers’ Guide, which aims to answer all of these questions and provide the information first time buyers need, with chapters on planning to buy, the application process, finding a house, the purchase process and moving in.
Speaking about the research, Beagle Street Managing Director Matthew Gledhill said:
“Despite the government’s recent housing white paper starting to reposition the housing debate towards renting rather than buying, it’s clear many people still want to buy a home of their own.
“Yet our research shows that many potential homebuyers either aren’t aware of the help on offer from the government or don’t know how to access these schemes.
“Buying a home is one of the key triggers for buying life insurance, with first-time buyers understandably keen to protect their biggest asset for their loved ones should the worst happen. This is just one among many important decisions first time buyers need to make when stepping on to the housing ladder, and we feel they should be provided with all the information they need.
“Here at Beagle Street we’re all about making complicated things simple – so we’ve applied the same logic we apply to providing life insurance to create a straightforward guide to buying a home, packed with actionable information to help potential homebuyers understand the schemes available to them.”
Originally released: 2nd March 2017