The number of first time buyers in the UK has fallen by 24% since 1994 and the number of lone first time buyers have seen a more significant 45% decrease, new research has found.
Also, those aged 16 to 34 are down by 49% since 1981 while 41% of people aged 35 to 44 are not earning enough to save for a deposit and 21% of over 55s are renting rather than owning a home.
The study from price comparison website MoneySuperMarket reveals the changing face of home ownership and suggests that a large portion of British people are putting their dreams of buying a home on hold.
Instead they are using their savings for short term commitments such as holidays or travelling with 43% doing so and only 20% say they would put their savings towards home ownership, with 22% preferring to put money away for a rainy day rather than buying a home and 27% saving for a holiday.
The research report says that this could be a result of the fact that home ownership has become increasingly more difficult over the last 20 years, with the average yearly salary accounting for only 11% of the average house price in 2018 compared to 23% in 1999.
Indeed, the demographic of a home owner has dramatically changed over the years, with 16 to 24 year olds particularly affected as the amount of home owners within this age bracket has seen a dramatic 68% drop between 1981 and 2016.
Due to the rise of house prices, larger deposits and increased rental costs, people are finding it increasingly harder to save. Those aged 25 to 34 now pay an average of 39% more on rent than those aged 55 and over did before purchasing their first home.
The data also reveals that there has been a 54% increase in the amount of those renting in the 34 to 50 age bracket from 1996 to 2016, with 60% of 35 to 44 year old renters citing a preference for renting over home ownership and 41% stating that they weren’t earning enough to even consider saving for one.
People also say they have found themselves compromising on many aspects when looking at purchasing home. Most commonly, first time buyers found they had to compromise on the size of their property with 36% finding this to be the case, while 29% of those surveyed found they had to settle for a less preferable location.
Specifically, those in the West Midlands had to make the most concessions when purchasing their first homes. In fact, more first time buyers in the West Midlands, some 42%, found they had to compromise on location when buying their first home than those in London at 40%.
Some 48% of buyers in the West Midlands also found they had to compromise on their budget, the most of any region in the UK. On the other hand, for Londoners the biggest issue was found to be space, with 51% stating the size of the property to be their biggest compromise.
‘It can be very disheartening for prospective buyers, especially younger ones, to look at the cost of buying a house. What used to be affordable 20 years ago is now proportionally double the investment, and accordingly we’re seeing a move towards favouring renting and even a lack of interest in saving towards a deposit,’ said Kevin Pratt, consumer affairs expert at MoneySuperMarket.