Friday, 24 September 2021

Property ladder getting tougher for every new generation

Property ladder getting tougher for every new generation

THE UK’s next generation of first-time buyers is facing shocking home truths about getting on the property ladder, with one in five 11- to 14-year-olds expecting to be able to borrow as much money as they want to buy a house.

Research from Halifax has revealed a disjointed picture of home ownership among young people aged between 11 and 21 over the biggest financial commitment of a lifetime, and a wake-up call for future first-time buyers to get more clued up on “adulting”.

A third of young people aged 11 to 14 are banking on mum and dad to cough up the cash. Meanwhile, more than one in five of their 18- to 21-year-old counterparts (21 per cent) are relying on the government to help them on to the property ladder.

Future first-time buyers have high hopes for becoming homeowners and 59 per cent of 18- to 21-year-olds feel it’s very important to own a home, but the report found a clear gap in house price outlook.

One in five 11- to 21-year-olds in London think they can snap up a home from as little as £50,000 up to £200,000 — when the average first-time buyer house price in London is currently £422,580.

While more than a quarter (27 per cent) of those aged 18 to 21 believe they’ll be homeowners by the time they are 25, in reality they will have to wait another five years until they are 31, or 32 if they are planning to live in London.

Almost one in four (23 per cent) of 15- to 17-year-olds believe that only rich people own their own homes, which is not surprising if a quarter of youngsters that age expect to save for 20 years towards a deposit.

Young men were more optimistic, as 23 per cent of those aged 18 to 21 reckon a deposit of between £5,000 and £10,000 is enough to buy a home, whereas only five per cent of females thought that would be enough — a bit short of the actual UK first-time buyer deposit mark at £32,321.

With an eye on the future, a fifth (20 per cent) of 18 to 21-year-olds are counting on inheritance to pay off their mortgage, with males being far more hopeful of a legacy clearing their mortgage than their female counterparts (31 per cent versus 18 per cent).

Halifax managing director Russell Galley said: “Despite being one of the most important financial decisions we’re ever likely to make, becoming a homeowner feels like a mystery for Generation Z who will soon be thinking about flying the nest.

“Although our research found that the vast majority of 11- to 14-year-olds understand what a mortgage is, one in 10 aged 18 to 21 think stamp duty is money to pay for stamps — so there’s clearly a job for all of us to help kids get a better idea of what’s involved with taking the first step on to the property ladder.”

When it comes to buying a house, older teens and young adults (18- to 21-year-olds) are less realistic, with one in six (15 per cent) thinking it takes more than a year to complete a home purchase.

As might be expected for Generation Z, the research found that the internet leads the race as the go-to place to buy a property (36 per cent) and rising to 44 per cent for 18- to 21-year-olds. This is followed by a “house shop” (33 per cent) and the bank (27 per cent).

Surprisingly, though, the survey also found that today’s youngsters consider meeting their new neighbours a bigger priority than getting WiFi — 32 per cent versus 24 per cent.

This was most pronounced amongst the 18- to 21-year-olds (41 per cent versus 24 per cent). For this age group, buying a sofa was also more important than having a housewarming party (12 per cent versus five per cent).

Halifax’s research was carried out online by Research Without Barriers and comprised 1,004 respondents aged 11 to 21 years. The research was conducted between September 15 and 18, 2017.

For more information, visit www.halifax.co.uk

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