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June 3, 2011 6:09 pm

Homeowners in decline

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Home ownership in the UK could become a rarity for an entire generation, new research has claimed.

According to a survey commissioned by Halifax, the majority of those aged under 45 are convinced that banks do not want to lend them the money to buy a home.

As a result, two-thirds of non-homeowners in the UK questioned said that, although they would like to buy a house one day, they would never be able to afford it.

Mortgage lending figures appear to back up their pessimism. There were 29,355 home loans granted in April – the lowest number of new mortgages since records began.

Young people appear so certain that they will not be able to buy a house that they are eschewing saving for a deposit. Only 5 per cent of those questioned said they were saving towards buying a house.

Halifax, which is the UK’s largest mortgage lender, said that young people were being put off by high property costs and restricted lending, and this could turn the UK into a nation of renters.

Typical deposits required just after the financial crisis were about a quarter of the value of a property, although these have now fallen to 21 per cent, according to the Council of Mortgage Lenders.

Barclays has even reduced the rate on its two-year fixed 90 per cent loan to value mortgage from 4.99 per cent to 3.79 per cent, with a fee of £999.

However, mortgage brokers have warned potential buyers that, with interest rates set to rise, and prices possibly falling, the risks of taking out a high loan-to-value mortgage could still outweigh the benefits.

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