Cologne, 28/08/2007 - Research from leading financial security company, Genworth Financial, has
revealed that while Germans would prefer to own their own homes, many are deterred from
buying because of the need for sizeable deposits and the perceived financial burdens when
considering the current economic environment.
Over 1,000 people in Germany were asked about their views on different aspects of homeownership as
part of Genworth Financial's 2007 Homeownership Survey, which has been conducted by Research
International. Participants were divided into two groups; the first was representative of the German
population between 20 and 50 years and the second was made up of people who had either purchased a
property in the previous two years or who intended to do so in the foreseeable future.
Discrepancy between the importance of homeownership and the actual homeownership rate
In Germany, owning one's own home continues to be a goal for many people. For most people surveyed,
being a property owner was one of their major ambitions in life. This assertion was tied to the dominant
ideology that "everyone should own a property sometime in life". Nevertheless, this desire to own a home
is not reflected in Germany's homeownership rate of just 43 percent. This is one of the lowest rates in
Europe, coming second only to Switzerland.
The survey also showed that the disparity between the attitudes of respondents towards homeownership
and actual homeownership levels could be mainly attributed to financial difficulties; those who are less
certain about their professional and economic future are more likely to shy away from the risks related to
financial commitments. Moreover, financial risks are more often considered a limit to homeownership in
East Germany than in West Germany. For the latter, two of the main reasons cited for not owning
properties in an earlier stage of life were not finding suitable places or lack of interest in buying.
New opportunities through Mortgage Insurance.
One of the main deterrents to homeownership is the challenge of producing an adequate deposit for the
mortgage. The length of time required to build savings and the amount needed for the deposit were cited
as the two main reasons why people postponed buying properties to later in life. The survey showed that
60 percent of respondents believe a minimum 20 percent deposit is necessary to buy a property. This
figure mirrors most German banks' requirements to approve a mortgage request. Many potential buyers,
especially young couples and families, do not have sufficient savings to produce this level of deposit,
despite their high monthly income.
By using Mortgage Insurance (MI), a product covering a lender's residential mortgage loans, banks can
grant access to homeownership to a wider range of customers whilst protecting themselves against
potential losses arising from their High Loan To Value (HLTV) mortgage exposure. If a consumer can
prove they have a sufficient regular income, the required deposit can be reduced to just 5 percent of the
property price or the total acquisition costs of the property. Consumers cannot directly take out Mortgage
Insurance but can benefit indirectly from MI cover as lenders are able to provide easier and earlier access
to homeownership through reduction of savings times.
"The homeownership study highlights the lack of information on the financial options available to buy a
first home. There is clearly a need in Germany to bring to light these options," said Matthias Dous,
Managing Director Central Europe for Genworth Financial's mortgage insurance business
About Genworth Financial
Genworth Financial, Inc. is a leading financial security company meeting the retirement, lifestyle
protection, investment and mortgage insurance needs of more than 15 million customers across 25
countries. In Europe, Genworth partners with banks, brokers, advisers and other financial institutions to
develop innovative mortgage insurance and payment protection products. For more information, visit
www.genworth.com
Issued by Genworth Financial Mortgage Insurance Limited incorporated in England (registered number
2624121) through its German branch, registered office: Im Mediapark 8, 50670 Köln. Genworth Financial
Mortgage Insurance Limited is regulated by the Financial Services Authority of the United Kingdom.
Media contact
About Genworth Financial
Genworth ist ein führendes Versicherungsunternehmen und bietet mehr als 15 Millionen Kunden in
24 Ländern Leistungen in den Bereichen Lebensversicherungen, Altersvorsorge, Kapitalanlage und
Hypothekenversicherungen. Weitere Informationen finden Sie unter www.genworth.de.
Genworth's europäische Hypothekenversicherungssparte wird durch die Genworth Financial Mortgage Insurance Limited mit Sitz in 80 Strand, London WC2R 0GR betrieben. Diese ist in
Großbritannien durch die Financial Services Authority genehmigt und wird von dieser beaufsichtigt.
