Young people fear they cannot afford to buy a home in the UK
Many young people in the UK fear they do not earn enough to buy a home and a significant number also feel that owning is a thing of the past, new research has found.
A quarter of young people aged 18 to 34 in the UK rely on inheritance to get on the property ladder and the same number are certain they will never be able to afford to buy their own home.
But not all want to be home owners with one in five saying that home ownership is a thing of the past, according to the study from UK home lender the Halifax.
The research also found that 48% of young people think it’s harder than ever to get on the property ladder, with one in 10 prepared to leave the UK in order to buy their own home.
The details of the research show that eight out of 10 feel that a lack of affordable property is keeping home ownership out of reach, and as a result 14% think they’ll need to rent forever.
However, first time buyers end up on average £651 a year better off buying than renting, according to the Halifax and despite the number of first time buyers reaching a 10 year high of 339,000 in 2016, half of 18 34 year olds don’t think home ownership is a realistic option for their generation with 65% saying they don’t earn enough to afford it.
Deposits remain too unrealistic and expensive for 52% of young people as the average age of those buying their first home has crept slowly up to 30 and more than half of young people feel that the average house price for a first home in their area is currently unrealistic for them.
Some 22% say that they would move to a cheaper area and even more of their younger counterparts aged 18 to 24 would be prepared to pack their bags for a bargain home elsewhere in the UK.
‘Even with the highest number of first time buyers in the last decade in 2016, many young people still feel they are running financial gauntlet with saving for a deposit, finding an affordable property in the right area and managing to fund living in the meantime,’ said Martin Ellis, Halifax housing economist,.
‘It’s never too early to do some research to help build a better understanding of how much is affordable, the borrowing options available and calculating what’s achievable to help make owning a property more of a reality,’ he added.
Overall 22% feel that home ownership is a thing of the past and even if they have managed to raise a deposit, some 33% feel mortgage criteria is too difficult for them to meet.
The report points out that there are still ways for people determined to get on to the first rung of the ladder, as many lenders offer mortgages for first time buyers with deposits of 5%. This could reduce the amount needed to nail the necessary deposit and longer mortgage terms help make monthly payments more manageable.
Indeed, in 2016 some 28% of all first time buyers with a mortgage chose a 30 to 35 year term, up from 11% in the past decade.