The last couple of years have seen a massive leap in the number of young people renting property. A combination of uncertainty in the economic climate, the threat of redundancy and job losses, wage cuts and the inability to get a mortgage and get on the property ladder has meant that many prospective first time buyers are reduced to renting.
Despite various government schemes to try and kick start the UK property market and enable for first time buyers to get on the property ladder, the situation still remains that most cannot obtain a mortgage. Those that can get approved for a mortgage usually have to borrow money from their parents for the large deposit.
With growing numbers of repossessions and rising unemployment, mortgage lenders are reluctant to lend money and over 50% of mortgage applications are turned down.
There is therefore now a generation of young people spending their adult lives in rented accommodation with little hope of owning their own home. A report states that this could lead to an explosion in the number of people claiming benefits. If these people cannot get on the property ladder and acquire equity in property, then by the time they reach retirement, they will be forced to rely on housing benefit to pay their rent. This could triple the current number needing government handouts and lead to a future generation of pensioners being entirely reliant on the government.
Britain is steadily changing from a nation of home owners to a nation of renters such as is found in many other parts of Europe and the main reason is many cannot afford the large deposit needed to get a mortgage. A recent report shows that around a million more people will be renting by the end of this decade and another half a million having to stay living with their parents. Compare this to the situation around 15 years ago when more than 40% of adults under 30 owned their own house.
Using current statistics and population projections, by 2060 the number of pensioners owning their own home would be down to 60% from around 75% at the moment. In terms of numbers this would mean another 3.5 million people claiming housing benefit or £8 billion being handed out compared to £5.3 billion.
These figures show the frightening future we face if mortgage lenders do not start easing up on restrictions for first time buyers and if rents continue to rise, these people can never save enough money to cover their rent and start saving for their own house.
Rachel Gawith writes about mortgages for WhatHouse.co.uk.
With growing numbers of repossessions and rising unemployment, mortgage lenders are reluctant to lend money and over 50% of mortgage applications are turned down.
There is therefore now a generation of young people spending their adult lives in rented accommodation with little hope of owning their own home. A report states that this could lead to an explosion in the number of people claiming benefits. If these people cannot get on the property ladder and acquire equity in property, then by the time they reach retirement, they will be forced to rely on housing benefit to pay their rent. This could triple the current number needing government handouts and lead to a future generation of pensioners being entirely reliant on the government.
Britain is steadily changing from a nation of home owners to a nation of renters such as is found in many other parts of Europe and the main reason is many cannot afford the large deposit needed to get a mortgage. A recent report shows that around a million more people will be renting by the end of this decade and another half a million having to stay living with their parents. Compare this to the situation around 15 years ago when more than 40% of adults under 30 owned their own house.
Using current statistics and population projections, by 2060 the number of pensioners owning their own home would be down to 60% from around 75% at the moment. In terms of numbers this would mean another 3.5 million people claiming housing benefit or £8 billion being handed out compared to £5.3 billion.
These figures show the frightening future we face if mortgage lenders do not start easing up on restrictions for first time buyers and if rents continue to rise, these people can never save enough money to cover their rent and start saving for their own house.
Rachel Gawith writes about mortgages for WhatHouse.co.uk.
