Research into millennials plans shows a third are saving for a home deposit
Just 11% millennials are planning to take out a mortgage in the next year, despite a third claiming they are currently saving for a property, according to new research.
The Nottingham building society analysed YouGov Profiles data to uncover the current living arrangements of young people aged 20 and 37 and their attitudes to buying their first home, as well as delving into the attitudes towards housing and the economy.
With the cost of a UK house averaging £226,000 many are choosing non-traditional routes to get onto the property ladder, and the research indicates that millennials are rejecting inflated city prices and central locations in favour of a location where they can feel at home.
The profiles data found that 64% of the age group agree that overall you get a better quality of life in the country, and a third claim they could never live in a big city.
A sense of community is also key when looking for their first home, with 52% wishing there were more community activities in their area. Only 20% believe there is a better sense of community in cities, indicating that the generation will be increasingly moving away from central city properties, focusing on more rural locations.
Looking at housing situations of the generation, some 26% of millennials are currently living with parents, and they are the age group most likely to be living with friends or housemates at 11% compared to 4% of the national population. Just 12% currently live rent free with parents, friends or family.
Despite the uncertainty around our departure from the European Union impacting the housing market and inflation, millennials are feeling optimistic about their finances, with 38% tending to agree that they are ‘better off’ now than they were a year ago.
Looking to the future, they are also the most positive age group about the next year, with 32% admitting they think their household financial situation will be better over the next 12 months, compared to 20% of the national population. Millennials are also most likely to be prioritising saving for the future at 49% over paying off debts at 34%.
Some 35% of millennials claim they take into account news about the economy before making big purchases, suggesting Brexit could be a major factor into why just 11% are planning to take out a mortgage over the next year.
Just 23% currently own a property with a mortgage, and just 3% own a property outright. Of those who have a mortgage, only 11% used a mortgage broker.
‘Getting onto the property ladder can be a daunting experience, particularly in periods of economic uncertainty. People regularly compare a range of providers when it comes to their energy and insurance so it’s surprising the research found that just one in 10 millennial house owners used a mortgage broker, meaning they don’t do the same for their mortgage. Especially considering it’s likely to be their most expensive outgoing,’ said Ben Osgood said senior mortgage manager at the Nottingham.