Research reveals sacrifices made by today’s first time buyers to get on housing ladder
Millennials in the UK say they are delaying relationships, marriage and kids to get on the property ladder, more than previous generations, research suggests.
Young adults are feeling the impact of soaring house prices and make a range of adjustments to their lives in order to be able to save for a deposit for their first home, according to the study by online mortgage broker Trussle.
When asked about the compromises made to buy their first home, some 16% of those aged 18 to 34 said they moved back in with their parents, compared to 5% of those aged 35 to 54 and 1% of people aged 55 and over.
Millennials are more than twice as likely to put off getting into a romantic relationship, twice as likely to delay having children, and 3.5 times as likely to sell their car, compared to the generation before them.
Some 15% of the younger age group said they delayed getting married compared to 5% in the middle age group and 3% of the older age group while 15% bought in the suburbs to save money compared with 8% and 5% respectively.
More of the younger age group moved further from work to find a cheaper house and more bought with a friend or a sibling, the research also found.
A number of other changes emerged, such as selling a car to put towards a first home deposit, giving up a gym membership, taking a second job and giving up on holidays.
The study points out that house prices are almost 15 times more expensive than they were 40 years ago, rising almost twice as fast as wages. Since 1978, the average UK house price has risen from £14,236 to £211,000, a rise of 1,382%. In comparison, the average annual UK salary has risen from £3,269 to £26,500.
For a lot of young people, the dream of home ownership is so unachievable that it’s no longer a top life goal. In fact, when asked about their top three life goals, millennials are focused on travelling the world was top at 27%, having children at 24%, and finding the perfect job also at 24%, while buying a home only ranked fifth at 21%. In comparison, buying a first home was the biggest life goal for both the previous generation at 36% and baby boomers at 42%.
‘The housing landscape has changed drastically since Generation X were buying their first homes. House prices have risen almost twice as fast as wages over the past forty years and young people are being forced to put their lives on hold in a bid to join the property ladder,’ said Ishaan Malhi, chief executive officer of Trussle.
‘It shows just how unaffordable it currently is for first time buyers and there needs to be serious commitment to innovation to make home ownership more affordable and accessible to young people once again,’ he pointed out.
‘Building new homes is not enough. We have seen new moves from the Government to enable renters to build credit, which is a step in the right direction to help young people. However, the major sticking point is that mortgage products are outdated. To fit the current landscape, lenders need to take a long term view on an individual, taking into account earning trajectory to assess affordability, and creating individual mortgage products based on personal circumstances,’ he added.