According to data which has just been published by Halifax, a fifth of would-be first time buyers believe that securing a mortgage would be impossible and are, instead, renting. The data, released by Halifax from the ‘Generation Rent’ report, showcases a strong difference between generations, with just 12% of the parents of those asked giving the same statement.
Back in 2012, both would-be first time buyers and their parents were far more pessimistic about the potential to secure a mortgage, with 21% of parents and 29% of their children believing getting approved for a mortgage was virtually impossible.
The report contained data from interviews with more than 40,000 20 – 45 year olds over a five year period and more than 4,000 parents over the past four years, both showcasing the above as well as an earlier release suggesting that would-be first time buyers have lost confidence as a result of rising property prices and tighter criteria for getting approval on a mortgage. At this moment, 43% of those interviewed are saving to buy their first home, down 6% from 49%.
Looking deeper into the results of the study shows that whilst the peak for first time buyer approvals stood at 402,800 in 2006 and the trough at 192,300 in 2008, this number is back on the rise up to 311,500 in 2014.
David Sharples, mortgage broker here at Search Mortgage Solutions has given his comment on the data released by Halifax, stating, “The positive which we can take from the recent Generation Rent report certainly suggests that first time buyers are gaining confidence in their ability to secure a mortgage, with a further 9% believing it’s possible than three years ago. For those on the edge and unsure as to whether or not they’ll be able to realise their dream of owning their own home in the coming years, it’s important to remember that so long as you have a strong credit score, can prove sufficient income and low levels of debt, securing a mortgage is by no means impossible. The likes of the Help To Buy Scheme are meaning more first time buyers can afford to buy with just a 5% deposit and the forthcoming introduction of the Help To Buy ISA will further offer an incentive to those would-be home owners saving hard. The bottom line is that things are looking up and, with mortgage rates at an all time low, it makes sense for saving hard to be at the top of the agenda for many young people, finally breaking out of the vicious circle of renting.”