The hurdles on the path to homeownership
Recent research shows a challenging picture for young people who aspire to be homeowners. An estimated 1.9 million hopeful homeowners harbour doubts about achieving the same level of homeownership as their parents. With 73% of these aspirants hailing from homes owned by their parents, only a mere 48% believe they can mirror this achievement, marking a significant decline of 25%.
Domino effect of declining homeownership
The dwindling rates of homeownership today seem to foreshadow an even more challenging future. The study reveals a pattern of inherited homeownership, with 81% of current homeowners and 68% of non-homeowners having parents who owned homes. This trend suggests that as the number of homeowners continues to fall, the prospects of future generations owning homes also diminish.
Closer look at UK homeownership
But the narrative of homeownership in the UK extends beyond these figures. A considerable majority (71%) of Britons who do not currently own their homes aspire to do so eventually. Yet, more than half (52%) of these 7.5 million hopeful homeowners – approximately 3.9 million – have little to no confidence they will ever achieve this goal.
Obstacles on the path to homeownership
The main hurdles on the path to homeownership include sky-high house prices (60%), the challenge of saving for a deposit (44%) and the difficulty of managing monthly mortgage repayments (33%). Additionally, securing mortgage approval presents a tough challenge for 31% of the hopefuls.
Role of government schemes
Surprisingly, younger homeowners are increasingly relying on government schemes to afford a home. This figure stands at 28%, which is over three times higher than the overall percentage of homeowners in the UK (9%).
Long-term mortgages the new norm
Mortgage terms exceeding 30 years are fast becoming the standard. Over one in three (38%) homeowners aged between 18-34 have opted for a term of 30 years or more, compared to just 15% of UK homeowners overall.
Bank of Mum and Dad a significant contributor
One in five homeowners (20%) aged between 18-34 count on financial support from their parents, making the ‘Bank of Mum and Dad’ a significant player in the housing market.
Affordability is the main barrier
Non-homeowners identified affordability as the primary obstacle to climbing the property ladder. Given these challenges, it comes as little surprise that younger homeowners aged between 18-34 are three times more likely to utilise government schemes. These schemes have assisted 28% of homeowners aged 18-34, compared to 9% of homeowners overall.
Do you require further information or guidance on this matter?
Embarking on a home-buying journey is an exciting venture, but it requires careful consideration – particularly when it comes to selecting the right mortgage. We’re here to guide you through this process. Don’t leave such a significant decision to chance; contact our team to discuss more.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
