New figures show that the typical person living outside of London, who starts renting at the age of 21, will spend over £100,000 on rent before they manage to buy their own home at the age of 32.
For those living in London, the situation looks even more dire, with an expected spend of over £270,000 on rent before becoming a homeowner.
However, 41% of young people fear that they will never get onto the property ladder at all and may have to rent for the rest of their lives!
Why has this happened?
Rapidly increasing house prices is the main cause of millennials being pushed out of the housing market.
The average two-bedroom property in London is priced at £472,163 and outside of London it’s around £200,000 which is astonishingly higher than the £55,000 price tag that their parents had to pay twenty years ago.
In addition, house prices are rising at a faster rate than the average income, as are most other living costs i.e. bills, petrol and food, so it takes far longer to save for a deposit.
You also often have to sacrifice luxuries such as holidays, a car or even just going out to eat if you want to own a house before you’re 30. Not to mention the vicious cycle of having to pay higher rent which makes it that much harder to save for a house and puts many millennials off altogether.
The irony is that it is actually cheaper to buy a house than it is to pay rent!
Is there any way to get onto the property ladder sooner?
One of the consequences of these increasing house prices, is that we are seeing more and more young people moving out of expensive areas like London, and heading to areas with more affordable housing, great job opportunities and easy commutes to cities.
Bristol, Hull, Brighton and the West Midlands are attracting a lot of young professionals for this reason.
There are also more and more government schemes being introduced to help first time buyers purchase a home sooner rather than later.
Help To Buy and other low interest loans are an option especially a bridging loan for those who are struggling to get a mortgage or need a fast alternative.
It’s always good to do some research and be open to other options even if it means a longer commute, or a new job in a new area. When it comes to buying a house, it will never be easy but that shouldn’t mean that you have to miss out!
BRIDGING LOANS
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Available to developers and investors with a track record in residential development and / or refurbishment
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