It’s Generation Why Bother as saving for home takes 8 years
A THIRD of millennials may never own a home and face more barriers to ownership than previous generations, a study claims.
Half of Generation Y – those aged between 23 and 38 – are likely to rent well into their forties, it stated.
Loans broker ABC Finance found that half of baby boomers, people born between 1946 and 1965, had owned their own property by the age of 30.
But spiralling house prices and rents cut this figure to 44 per cent for Generation X, people born from 1966 to 1981. And it falls further to just 28 per cent for Generation Y.
Millennials must save for eight years and four months to put down a £42,836 deposit – 20 per cent of the cost of an average two-bed house, which is currently £214,178.
In London, where buyers typically need £82,352, it will take 15 years and
11 months of saving on an average millennial wage of £25,920. An
ABC Finance spokesman said: “2018 saw a lot of coverage aimed at ‘generation rent’, implying that younger people were content to stay in rented accommodation with no ambition towards buying.
“The truth is that many don’t have the means to save for a deposit and can be left having to rent a property with issues ranging from the dwelling itself to the landlord. Essentially, it’s less of a generational attitude and more down to the fact that property ownership is out of most people born after Generation X’s grasp – especially for those not born into a family of wealth or property assets.”
The research found one of the biggest factors in being able to buy a house is parents’ property wealth. “It’s not all down to who your parents are although that does help,” he added.
“The downturn of home ownership with younger people is down to a number of economic and social factors including a more complex job market, skyrocketing house prices and global financial instability.”
Dominik Lipnicki, of home loan broker Your Mortgage Decisions, added: “House prices have risen far faster than wages, this is further complicated by rents increasing above inflation, making it very difficult to save for deposits.
“Unfortunately, governments of all colours have failed to build enough houses.”