Latest research suggests Britainís younger generations are giving up on owning a home and renting is becoming the norm. Find out more about current lending trends to see if fears of being turned down a mortgage are actually unsubstantial.
Two thirds of the 8000 20-45 year olds surveyed believe they have no prospect of buying a home, Halifax found.
The general perception is that banks are not lending and the sizes of the mortgage deposits necessary are too high, meaning only five percent are making sacrifices to save for a deposit, compared to 95 percent who say they have no spare cash to do so.
ìIt has never been a simple matter to buy your first home, but this research has demonstrated that it is not just a matter of a lack of available income which is daunting todayís first time buyers,î commented Stephen Noakes, Halifax Mortgages commercial director.
ìOur research indicates just how many potential first time buyers are not making it to the application stage because of a fear of being declined.î
Mortgage Lending ñ Up or Down?
Latest statistics from the Council of Mortgage Lenders (CML) revealed gross mortgage lending in April declined to about £9.8 billion.
This was a 14 percent fall from the £11.4 billion lent in March, and five percent down from the £10.3 billion lent in April last year.
These figures suggest Brits remain cautious about stepping onto the property ladder, although the extra holidays and good weather experienced in April could in part explain this dip from March.
Bob Pannell, CML chief economist explained it is hard to read the immediate market situation due to the extra bank holidays in April. He does however suggest mortgage lending activity is expected to remain flat in the short term, but that interest rates could keep the market steady as they do not look set to rise much this year.
The report by Halifax showed 84 percent of first time buyers are put off saving for a deposit for a home through fear that banks do not want to lend to them. While 92 percent see the current climate as particularly hard for first-time buyers to obtain a mortgage and 60 percent believe it is virtually impossible.
For 84 percent of first time buyers, the high deposits required to obtain a good mortgage rate has meant they have to rely on parental financial support, Clydesdale and Yorkshire Banks showed.
This figure has more than doubled since 2005, highlighting the difficulty of attaining a mortgage in the current economic climate, whether the interest rates are low or not.