PWC predict that more than half of under 40s will be renting homes by 2020 as rising house prices and deposits will prevent the next generation from buying homes. The report suggests deposits of 18% will be required in order to get a mortgage and, by 2020, a deposit of 18% on an average house could equate to £64,800.
Will the Government's Help to Buy and Right to Buy initiatives help first time buyers in getting a lift up onto the property ladder? There cannot be enough of these types of properties to go around as demand already outstrips supply. And even though Council and housing association properties will be sold at discounts, buyers will still need to be able to afford a deposit and mortgage to get onto the ladder.
Driven by a decade of soaring house prices before the financial crisis and lower loan-to-value ratios post-crisis, the deposits needed by first time buyers have risen significantly. As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20 to 39 age group