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Young Brits feel shut out of home ownership

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Written by: Heather Greig-Smith
23/03/2017
A quarter of young Brits are certain they will never own their own home.

Research from Halifax on the attitudes of young people who don’t own a property show almost half (48%) think it’s harder than ever to get on the property ladder.

While one in 10 is prepared to leave the UK in order to buy their own home, a quarter of 18-34-year-olds think the only way they’ll manage is by inheriting the cash.

Eight out of 10 feel that a lack of affordable property is keeping home ownership out of reach, and as a result a significant number think they’ll need to rent forever. This is despite the fact that first-time buyers end up on average £651 a year better off buying than renting.

Council of Mortgage Lender figures show the number of first-time buyers reached a 10-year high of 339,000 in 2016, and first-time buyers are continuing to drive the market in 2017 alongside remortgaging. However,  half of 18-34-year-olds don’t think home ownership is a realistic option for their generation.

Two thirds said they don’t earn enough to afford it. Deposits remain unrealistic and expensive for more than half of young people, as the average age of those buying their first home has crept slowly up to 30.

More than half of young people feel that the average house price for a first home in their area is currently unrealistic for them, causing them to think about relocating to boost their chances of buying.

One in five 25-34 year-olds would move to a cheaper area, said Halifax, and even more of their younger counterparts aged 18 to 24 would be prepared to pack their bags for a bargain home elsewhere in the UK.

The average deposit put down for an average first-time buyer home is £32,321, rocketing to £100,445 in London. Northern Ireland has the lowest at £16,695 – less than half of the average deposit needed in the South East at £47,472.

Although aspiring homeowners could begin gravitating towards the UK’s more affordable areas to get onto the property ladder, more than one in five feel that home ownership is a thing of the past. Even if they have managed to raise a deposit, a third feel mortgage criteria is too difficult for them to meet.

Martin Ellis, Halifax housing economist, said: “Even with the highest number of first-time buyers in the last decade in 2016, many young people still feel they are running a financial gauntlet – saving for a deposit, finding an affordable property in the right area and managing to fund living in the meantime.

Halifax said there are still ways for people determined to buy to get on to the first rung of the ladder, such as 95% loan-to-value and longer mortgage terms help make monthly payments more manageable.

In 2016, it said 28% of all first-time buyers with a mortgage chose a 30 to 35-year term, up from 11% in the past decade.

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