More than half of aspiring first-time buyers believe they will never get on the housing ladder, according to new research. The Federation of Master Builders (FMB) says a shortage of small building companies delivering new homes is partly to blame.
The HomeOwners Alliance's 10th annual HomeOwner Survey found that while homeownership remains a powerful aspiration, confidence in ever achieving it is collapsing.
The survey found that 73% of non-homeowners want to own their own home, yet 52% of those aspiring buyers doubt they will ever be able to do so. Aspiring first-time buyers are markedly more pessimistic than the wider public, with 51% believing now is a bad time to buy, compared with 35% of overall adults in the UK.
The survey also found widespread confusion about mortgages is adding to the problem, with many would-be buyers ruling themselves out before exploring their options. 62% wrongly believe they need a deposit of at least 10%, 49% think borrowing is always capped at four or five times their income, and a quarter believe they cannot even look into mortgage options until they've found a property.
The Federation of Master Builders (FMB) says the pessimism reflects a housing market that isn't building enough of the right homes in the right places. Small building companies, who once delivered a far higher share of new homes in Britain, have seen their share of housebuilding shrink over recent decades, squeezed out by planning delays, red tape and a shortage of small sites coming forward.
Brian Berry, Chief Executive of the FMB, said:
"It's deeply worrying that so many people have simply given up hope of ever owning their own home. It is, however, not surprising when you look at how few homes are actually being built, and by whom. Small and medium-sized building companies used to deliver a much greater share of new homes in this country than they do today, instead they are squeezed out by a planning system that favours the big volume housebuilders and works against smaller firms building on smaller sites. If we want to restore people's confidence that homeownership is achievable, we need to get more small building companies building again and get more suitable homes for the right people, in the right places. Fixing the mortgage confusion highlighted in this survey matters too - but it won't count for much if there still aren't enough homes for people to buy."
Paula Higgins, Chief Executive of the HomeOwners Alliance, added:
"It is deeply concerning that more than half of aspiring homeowners believe they will never get onto the ladder. Some of that comes down to outdated assumptions about deposits and borrowing that are ruling people out before they've even started, and we'd urge anyone in that position to get proper, independent guidance before writing themselves off. But the FMB is right that better information can only go so far. If there aren't enough of the right homes being built, particularly by the small and medium-sized builders who understand and love their local areas, then confidence will keep draining away no matter how well people understand their mortgage options."
For more information visit fmb.org.uk
