Latest figures released show that a lower percentage of young people are saving for a mortgage deposit due to finance barriers to homeownership. So is the UK doomed to be a nation of renters for the indefinite future?
We take a look at the figures and see how you can take that difficult step onto the first rung of the property ladder.
Less People Are Saving for a Deposit
The proportion of 20 to 45 year olds saving for a deposit has dropped from 57% to 43% says Halifax. The Generation Rent report found that this was due to high property prices and low wages which created a situation where young buyers simply can’t afford to buy. The study also suggests many people from London worry that they will never own their own home.
As a result many people are now accepting long-term rentals as the only option for living ‘in a nice home, in an area they want to live in and in the right size of property’.
‘If this pattern continues then it suggests that over the long-term, homeownership levels in the UK will continue to decrease,’ says the report.
Figures from the Department for Communities and Local Government seem to support these findings stating that the number of 25 to 34 year olds who are privately renting has more than doubled in the last decade.
Housing and homelessness charity, Shelter, commented on the report, saying,
‘House prices have now shot up to ten times the average wage, leaving 'generation rent' with two alternatives - either carry on living with mum and dad, or pay out dead money to landlords.
‘And with prices still on the rise, it's no surprise so many young people feel their dreams of owning a home are slipping out of reach. The only way to give ‘generation rent’ any real hope of a home of their own is for politicians to deliver a big and bold plan that will finally deliver the affordable homes we desperately need.’
How to Get on the Property Ladder
Property prices, although not at the speed they once were, continue to rise, yet with the government’s Help-to-Buy scheme and other services, mortgage approvals for first-time buyers has hit its highest since 2007. So it is possible for young buyers to reach their goal of owning a property.
The average amount a non-homeowner can afford to save each week is now £33.35, something that the new Help-to-Buy ISA can hold for a future purchase. Other ways of getting on the property ladder include:
• Ask your parents for the money!
• Enter a shared ownership scheme
• Purchase under the Right to Buy
• Enter the NewBuy scheme
• Apply for a guarantor mortgage
You don’t have to be a self-made millionaire to afford a property; it just takes some careful consideration and a knowledge of all the facts. And when you do decide to make the move we’re here to help make the process as seamless as possible.