If you are an 18-30-year-old currently living in the UK, you have undoubtedly felt the effects of changes in the housing market that have occurred over the past 10 years. With the spending habits of many young adults gradually shifting from ownership to renting, various pieces of research have observed the increased difficulty involved when setting money aside for a deposit. All of which has resulted in the chances of a young person securing their first mortgage and getting on the property ladder being significantly reduced.
But what factors have contributed to this change? Is there anything that the youth can do? Well, with these questions in mind, let’s look at some of the potential causes and actions that any young person should be aware of in the current housing market.
What Are the Causes?
One of the primary issues currently affecting young people is the rising price of rental fees. With much of their income being immediately spent on bills and rent, the millennial generation are finding it harder than ever to save enough money for even the cheapest deposit. Not to mention the fact that, in the last 10 years, first-time deposits have increased in price by more than double. All of which has greatly damaged young people’s ability to buy their own property.
What’s more, many young adults currently feel that the government is not doing enough to finically support first-time buyers. Especially in the face of all the previously mentioned issues. Although the Help-to-buy scheme and Shared ownership plan are available, the lack of direct monetary loan has only hindered their ability to purchase a home.
What Can Young People Do to Get on the Property Ladder?
There are, however, a number of actions that millennials can take in order to ease this difficult process. Firstly, it’s always useful to consult a professional for expert advice and guidance. They will be able to evaluate your individual case, before providing specialist advice on your best course of action. More specifically, we would recommend that you initially consult an estate agent, they will be able to point you in the right direction when it comes to value for money. Following this, you should always invest in a property survey to ensure that your home is in good condition.
Another good habit for first-time buyers is to begin the savings process early. By putting a set amount of your income aside each month, you can guarantee that consistent progress is being made towards your goal. No matter how slow or frustrating the process can seem at first.
Finally, any young adult should also be aware of the few support programmes that are currently available to them. This includes the Help to Buy scheme. First introduced in 2013, this government led programme was created in order to assist people in getting a foot on the property ladder. Specifically, it allows first-time buyers to borrow up to 20% from the cost of a newly built home, interest free for the first five years. The remaining value is then made up with a 5% deposit and a 75% mortgage.
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