David Fell, lead analyst at Hamptons, said: “Homeownership rates among younger generations slid significantly after the 2008 downturn, and it’s only in the last five years that they’ve begun to recover.
“This recovery has been driven by reform of stress testing which was introduced in response to the financial crisis, allowing for re-emergence of mortgage products for those with the smallest deposits. These are products which had all but disappeared during the last downturn.
“But homeownership rates for millennials in their peak home-buying years remain around 35 percentage points lower than for baby boomers at the same stage in their lives.
“However, even as some mortgage stress tests have been relaxed, higher interest rates since 2022 have slowed the recovery in homeownership for younger generations.
“That means that mortgage repayments for those with deposits of less than 10 per cent often end up more expensive than paying rent on the same home.
“While borrowers still have to prove they can comfortably afford repayments if mortgage rates were to rise further from today’s elevated levels.
“This has kept some would-be buyers, particularly those with non standard employment terms, renting for much longer.”
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