Fewer younger people on the mortgage ladder, survey shows

July 2014

Fewer younger people on the mortgage ladder, survey shows: The number of young people who own a mortgage has decreased in the last five years, according to figures published by the Department for Communities and Local Government.

The research – The English Housing Survey – estimated there are approximately 22 million households in England, of which two thirds (65%) are owner occupied, one fifth (18%) are privately rented and 17% are socially rented.

According to the report, in 2008/09 just over one fifth (21%) of respondents aged 35 or below had a mortgage, in the survey’s latest edition (2012/03) though, this figure dropped below the one fifth mark (18%).

Correspondingly, the amount of 25 to 34 year olds who privately rent has increased by almost one sixth over the same timeframe – 31% in 2008/09 compared to 45% in 2012/13.

Furthermore, owner occupiers are estimated to spend one fifth (20%) of their income on their mortgage, notably less than private renters (40%) and social renters (30%).

On average, mortgage holders repay approximately £149 per week; however, this varies for interest only mortgages (£120) and repayment mortgages (154).

Private renters, on the other hand, shell out an average of £163 a week for their accommodation – a fractional decrease from 2011/12’s figure (£164), but a £10 increase on 2008/09’s average (£153).

However, despite their pricier accommodation fees, private renters are said to earn, on average, less than owner occupiers. According to the survey, three in ten (30%) private renters earn in excess of £700 a month, compared to almost half (47%) of mortgage owners.

In addition, going off the study’s findings, home owners (95%) are visibly more satisfied with their accommodation than social (81%) and private (84%) renters.

More than six in 10 (61%) private renters anticipate they will own a house in the long-term, compared to the one quarter (27%) who expect to still be renting. Furthermore, four fifths (80%) of social renters imagine they will be on the mortgage ladder in the long-term, opposed to one sixth (16%) who plan to remain renting.