A quarter of all young Britons are certain they will never own a home and half think it is as harder than ever to get on the property ladder.
The latest research from the Halifax shows 25% of young Britons are certain they will never own their own home and a quarter of 18-34 year olds are relying on inheritance to get on the property ladder.
Of those surveyed 48% of young Brits believe it’s harder than ever before to get onto the property ladder and one-in-10 are even prepared to leave the country to do it.
Despite the number of first time buyers reaching a 10-year high of 339,000 in 2016, half of 18-34 year olds do not think home ownership is a realistic option for their generation.
Family members can help with the equity release buyer accessing wealth using a lifetime mortgage to give a child or grandchild the deposit to get on the property ladder.
House prices too high for young Britons
For about 52% of young people feel the average house price for a first time buyer is unrealistic for them forcing generation rent to think about relocating to improve their chances of buying.
The same proportion also feel the amount needed for a deposit remains expensive as the average age for those buying their first home is 30 years of age.
On average in the UK first time buyers purchase a property with an average price of £205,170 with a deposit of £32,321.
With competition from buy-to-let investors and reduced supply of suitable properties, prospective home buyers must continue renting and saving for a bigger deposit.
The following table shows the average house price and deposit paid by first time buyers for different regions in the UK for 2016.
| Region | Average house price | Deposit paid |
|---|---|---|
| Greater London | £402,692 | £100,445 |
| South East | £272,777 | £47,472 |
| South West | £200,465 | £34,306 |
| West Midlands | £159,732 | £24,162 |
| East Anglia | £196,367 | £31,864 |
| North West | £144,367 | £21,025 |
| East Midlands | £153,779 | £23,062 |
| North | £124,117 | £18,324 |
| Yorks and the Humber | £135,719 | £19,462 |
| Wales | £133,730 | £17,550 |
| Northern Ireland | £115,269 | £16,695 |
| Scotland | £137,188 | £20,729 |
Prices are highest in Greater London with an average price of £402,692 and a deposit of £100,445, twice as much as the South East with a deposit of £47,472.
The smallest deposit is in Northern Ireland at £16,695 followed by Wales with £17,550, less than half that of the South East.
These figures compare with home movers where the average house price is £245,075 and deposit of £67,575, more than twice that of first time buyers.
In contrast, the older homeowner is likely to have equity with no mortgage and can use equity release from the property to maintain their lifestyle. This opportunity also applies to re-mortgage buyers that can use capital raising from their home.
Moving to an affordable area
Of the Britons in the survey aged 18-34 two thirds said they do not earn enough to afford to buy and one in five of the 25-34 year olds would move to a cheaper area and live elsewhere in the UK.
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 the financial gauntlet.
They struggle to save for a deposit, finding an affordable property in the right area and managing to fund living in the meantime, says Mr Ellis.
Aspiring homeowners could head towards more affordable areas to get on the property ladder, however, 22% feel home ownership is a thing of the past.
Even if they do manage to save the average deposit of £32,321 a third feel the mortgage criteria is too difficult for them to meet.
Lenders have realised the difficulties for first time buyers and now offer mortgages requiring only a 5% deposit and longer terms up to 40 years to help reduce the monthly repayments.
In 2016 about 28% of all first time buyers with a mortgage selected a 30 to 35 year term up from only 11% in the past decade.
What are your next steps?
Call our LCM mortgage brokers for advice advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.
Learn more by using the property value tracker chart, mortgage monthly cost calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even gift to a family member.
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