It is not as though people need much proof or details about the changing nature of property buyers. Anecdotal evidence is enough for people to realise that home-buyers are older than in previous generations and considering the cost of buying property, this cannot be a surprise. Latest figures from ONS indicate that people aged between 22 and 29 years old are now much less likely to buy their own home.
Between 2008 and 2017, the percentage of this group owning property fell from 37% to 27%. There is also little hope or expectation that this group will develop into a financially stable group because 53% of the same group have stated they hold no money in an ISA or savings account. Between 2008 and 2010, this figure was 41%, so this has grown too.
However, there is hope that the people who are financially savvy are doing more to protect their finances and to increase their chances of stepping on to the property ladder. For the people who were saving money, the average level of savings stood at £900 but this has increased to £1,600. It may not be the biggest positive in the world but it does provide some optimism that people understand the importance of financial savings.
Ross Boyd is the founder of an online mortgage company and he stated; “For home ownership levels among those in their twenties to have fallen by 10% in less than a decade is a brutal reminder of the struggle young people face getting onto the property ladder. With house prices in so many areas of the country out of people’s reach, the transition from generation own to generation rent is accelerating by the day.”
Boyd also pointed out the challenge that many youngsters face in saving money. Even though people find that they cannot step onto the property ladder, monthly rental payments are usually more expensive than what they would pay in a mortgage.
Boyd continued; “This partly explains the increase in the number of people with nothing in a savings account. With inflation above target for so long, and rents so high, many young people have nothing left to put aside. Unless you’re fortunate enough to be able to cash a cheque from the Bank of Mum and Dad, finding the deposit required to buy a new home can be an insurmountable challenge.”
There are many challenges for prospective buyers to face but knowing the problems allows people to plan for these challenges. Hopefully greater awareness of the market, and its pitfalls will help people take control of their finances.
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