Over the past few decades, the UK’s property market has changed dramatically. Property has become less and less affordable, and buyers are having to save for longer and borrow more than ever before in order to get on the property ladder.
Thirty to forty years ago, things looked pretty different. According to @pricedoutuk:
“In 1980, the average house price was just over £20,000, around 3.5 times the average income. It was fairly easy to put down around a year’s salary as a deposit and get a loan for the rest.”
At this time, young people found it relatively easy to buy their first home and homeownership seemed attainable for most people living and working in the UK.
Although today’s young people face significant financial challenges to home ownership, recent research from the Halifax has revealed that many future first time buyers have no idea what to expect from the housing market. With little understanding of how much houses cost or what’s involved in buying property, tomorrow’s house hunters seemingly have a lot to learn.
Young people don’t know how much houses cost
The research from Halifax showed that many young people have very little idea about the cost of property. One in five 11 – 21 year olds believe they can buy a home for as little as £50,000 – £200,000. In reality, first time buyers will be paying significantly more, with those looking to buy in London forking out an average of £405,000 for their first home. Despite the fact that many young people believe they can pick up a house for a bargain, 23% of 15-17 year olds believe it’s only rich people who own their own homes.
The bank of mum and dad
One thing that the research from Halifax highlighted was that many young people expect to be able to borrow all of the money they need for a house purchase from their parents. A third of 11-14 year olds expect the bank of mum and dad to pay for their new home. Although these future buyers are still very young, this does display a worrying lack of understanding of how the property market works and could cause potential problems for tomorrow’s house hunters.
Despite all of the financial challenges that first time buyers face, 59% still feel that it’s very important to own your own home. This shows that, even though saving for a house may be harder than ever for tomorrow’s buyers, young people are fairly determined to invest in bricks and mortar of their own.
If you’re a first time buyer yourself, you can learn more about finding a mortgage and securing finances for your house purchase by exploring our site or getting in touch with a member of our team.
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Written by: Editorial Team