There has been much in the news about millennials and property over recent months; from the abolishment of stamp duty in the Chancellor’s last budget for most first time buyers, to the suggestion millennials should stop buying avocados to afford to get on the property ladder. There’s no denying that many millennials are now facing higher deposit requirements in order to buy their first property, pricing many young people out of the UK housing market for longer.
Despite this, it has been reported that millennials are changing the property market, from the way they find their homes to what they look for when searching for their dream property. Last year, Nationwide Mortgages reported that 99% of millennials searched online for property, while 58% found their home on a mobile device. In addition to this, the infographic created to display the research reported that out of all the age groups surveyed, millennials were least likely to view their property as a permanent home.
According to a recent article, it has been revealed that the average first time buyer is now 30 years of age and earns a salary of £41,000 per year. Though some reports have suggested home ownership by UK millennials is down when compared with counterparts from other countries around the globe, many millennials have laid out their intent to buy property within a few years proving that home ownership is still a priority for most young people.
Naturally, while the younger generation continue to save for house deposits to get on the property ladder, millennials and property is still a hot topic for many parents as they find their children turning to ‘the bank of Mum and Dad’ for help with making their dream of home ownership a reality. In a report last year, Legal and General estimated parents would loan more than £6.5bn to their kids during 2017, a significant increase on the amount estimated for 2016.
With much of the outlook on millennials and property ownership predicting doom and gloom, what can be done to ensure more young people are able to afford properties and stop being dubbed ‘generation rent’? Labour leader Jeremy Corbyn has previously been vocal about wanting control on escalating rents, and with Theresa May’s recent proposals to reform the UK housing market being outlined, there could be hope on the horizon for Britain’s younger property owners to-be.
Lower rents in the rental sector could help would-be homeowners pare back on monthly outgoings and save for deposits faster, while also living independently. The availability of affordable housing and the Help to Buy Scheme which has been confirmed until the end of the year 2020 could also have an impact on getting more millennials their own homes. There are a number of positive case studies about getting on the property ladder during youth via government schemes, some of which differ according to where you’re located.
Meanwhile, some have suggested that instead of government schemes, a change in taxes should be introduced in order to shake up the relationship between millennials and property. The concern is that millennials renting in to middle age will cause further issues for the UK property market due to lack of property purchases, and that this will be further burdened by those who are currently homeowners and are under occupying properties or who own multiple homes.
One way of solving this suggests an article in The Times from last month, is to scrap stamp duty altogether apart from in certain instances such as for those looking to buy a second property. The thinking behind this is that it would help to get people buying and increase demand.
Chas Dawson of Dawson & Associates says ‘A reduction in fees and stamp duty or deferred interest rates for certain groups eventually leads to property inflation. Good quality social housing at reasonable rents is the way forward to providing affordable housing for those who wish to purchase.’
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