A survey carried out for the High Street Bank, Halifax, reveals today just how disillusioned a generation of workers in the UK are, and how they view the prospect of purchasing homeowner insurance as an ever dwindling dream.
Generation of tenants
The report shows that a whole generation is becoming reconciled to the fact that they may never be able to afford a home of their own, as banks make the qualifying criteria for getting a mortgage more difficult. The report shows that although the vast majority of 20 to 40 year olds want to follow in their parents footsteps and possess a home of their own they are quickly coming to realise that they are trapped in a financial straightjacket.
Huge survey, huge deposits, huge disappointment
The report is more worrying because of the number of people who took part. This was no bite size sample, over 8,000 were questioned and 9 out of 10 still aspired to have their names on a mortgage deed, however, the stress of actually applying for a home loan and the damaging effect on one’s credit rating when being turned down was turning more and more people away from pursuing their dream.
Of course the main factor quoted was the huge deposits most banks are demanding before they will hand out a mortgage, the report shows that many of those questioned had tried to save the cash but realised it was beyond their reach. It seems as though we now have a generation who through no fault of their own will be buying home contents insurance on a house they rent rather than one they own. It is not only a worry for them; it should be a worry for the banks.
Impact could be far reaching
If the UK suddenly becomes a nation of tenants then the banks will be bidding goodbye to a source of revenue that has kept them wealthy for a long time, mortgages have been the lifeblood of the Halifax and other banks for a long time. To this end the Halifax has declared to take action on the report by the National Centre for Social Research immediately.
New approach from the Halifax
A spokesman for the bank said it would have new measures in place by midsummer to give prospective mortgage applicants a comprehensive insight into its lending requirements before they start the process. It will involve prospective buyers being given a promise of the amount the bank will lend to them. The process won’t show on their credit report, and if their application is rejected, the reason why, with tips on how to become more successful in the future will be given.