The Courier & Advertiser (Perth and Perthshire Edition)
25% of young people relying on inheritance
PROPERTY: Non-homeowners hoping legacies can get them on housing ladder
One in four young people who do not own a home are pinning their hopes on an inheritance to help them on the property ladder, research has found.
A total of 25% of 18 to 34-year-olds are relying on an inheritance to buy their first home, according to Halifax. The same proportion (25%) think they will never own their own home.
Nearly half (48%) of those surveyed think it is harder than ever to get on the property ladder – with nearly one in five (18%) saying they would consider leaving the UK to buy their own home.
One in seven (14%) young nonhomeowners think they will be renting for the rest of their lives. Two-thirds (65%) of those surveyed said they do not earn enough to buy their own home.
Various government schemes have been unveiled in recent years to give people a helping hand onto the property ladder, including Help to Buy and Lifetime Isas, which are set to launch in April. A housing white paper has been launched to help buyers and renters.
Figures from the English Housing Survey recently showed that one in five households in England is living in private rented accommodation, while home ownership has fallen to its lowest level in 30 years.
Home ownership eased down from 63.6% in 2014/15 to 62.9% last year – the lowest proportion since 1985 and eight percentage points down on its peak of 70.9% in 2003.
Martin Ellis, a housing economist at Halifax, said many young people feel they are running a “financial gauntlet” – by saving for a deposit, finding an affordable property in the right area and funding living costs.
He said: “It’s never too early to do some research to help build a better understanding of how much is affordable, the borrowing options available and calculating what’s achievable to help make owning a property more of a reality.”
Some tips from Halifax for would-be home buyers include:
Try out calculators and tools: you can work out how much you could borrow, how much deposit you would need and what monthly payments would be
Work out your mortgage options. A mortgage adviser can give a clearer idea of your options. Some lenders will allow first-time buyers to borrow up to 95% of the property value, or you may have someone to guarantee the mortgage.
Create a money plan. Working out how much you will need for monthly costs will help you understand kind of mortgage you can afford, factoring in bills and expenses.
Check your credit score a year before you plan to get a mortgage and keep track of it.