Frustrated renters are giving up on hope of buying

House and piggy bank

Young families and workers say they are giving up on the idea of ever owning their own home despite 2014 seeing the highest level of first-time buyers in seven years.

Halifax's Generation Rent report found there is a growing perception among potential first-time buyers that they will never be able to buy their own home – with the number of potential buyers aged between 20 and 45 saving for a deposit dropping by six percentage points to just 43% in 2014.

The size of deposit, high property prices, and low and stagnated wages were cited as the three biggest reasons as to why they are giving up, with a growing minority believing they will rent forever.

Some 16% said they now don't want to get on the property ladder at all, compared to 13% in 2013.

According to the findings, the average amount non-homeowners can save each week towards a deposit is just £33.35 and they think it will take them more than five years to get enough money together to buy a home.

Meanwhile, more than three-quarters (79%) of would-be first-time buyers believe that banks don't want to lend to first-timers at all.

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The reality

However, this gloomy perception among those surveyed by Halifax is not backed up by reality, as mortgage approvals for first-time buyers hit 311,500 in 2014 – up from a low of 192,300 in 2008, according to data from the Council of Mortgage Lenders.

The rise has been brought about in part by the government's Help to Buy scheme, which helps people buy homes by providing equity loans and mortgage guarantees.  

Despite the improvement in home loans being granted to first-timers, a lack of affordable housing has increasingly become a political issue, with both Labour and the Conservatives promising to build hundreds of thousands of new homes if they win the election in May.

In last month's Budget, Chancellor George Osborne announced a new Help to Buy Isa, which will see the government give savers an extra £50 for every £200 saved with the top-up capped at £3,000.

Housing charity Shelter's director of communications, policy and campaigns Roger Harding, said: "Even with interest rates at historic lows, sky-high house prices mean millions are still locked out of homeownership.

"For the first time in decades, young people today are facing worse prospects than their parents because successive governments have ducked the question of how to fix the housing shortage. House prices have now shot up to ten times the average wage, leaving generation rent left with two alternatives – either carry on living with mum and dad, or pay out dead money to landlords."

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