For many years the number of young people buying their first house has been falling. There have been a wide range of reasons for this, with lifestyle factors making an impact as well as economics.
In a recent study, it was found that home ownership fell amongst all income brackets for 25-34-year-olds. Amongst the top income bracket, who had a household income of £41,000 a year after tax, home ownership had fallen from 85% to 65% in the last 20 years. The fact that this fall in home buying has equally affected wealthier young people suggests that there might be more factors than just economics.
A lot of young people simply aren’t considering home ownership until far later in life, if they are considering it at all. Another study predicted that one in three UK millennials would never own a home. Many young people have been spending more on other things, like travel and rented accommodation, because saving for a house isn’t a priority. The previous urgency to buy a house has been replaced by a sense of living in the moment and waiting until they are older to start a family, buy a house and settle down. Many millennials feel like owning a home is completely unattainable so have decided to spend their would-be savings on experiences for now instead. Different approaches to working have also been on the rise, with ideas like flexible hours, remote working and spending time abroad appealing to this new generation. These alternative lifestyles mean that owning a home can sometimes be a negative, tying people down to endless mortgage payments and one location.
Rising house prices have obviously made an impact on young people’s ability to afford a house. Due to record house prices in the UK, the average first-time buyer needs to put down a deposit of around £33,000. The amount needed for a deposit is so high that people need to be earning or inheriting a great deal to get on the property ladder. With rising rent bills, student debts and a high cost of living, this simply isn’t possible for many young adults. House prices have increased almost 160% since the middle of the 1990s and the income of young people has only grown by 23%. With a population that is living to an older age, young people will have to wait even longer for any help from their parents or grandparents towards a deposit.
