Buying your first property is a major milestone for a lot of young people, up there with starting your first full-time job or buying your first car.
But it seems that this could out of reach for many, as new figures show that home ownership amongst young people is at its joint lowest level on record.
Just less than 45% of those aged 20 to 30 are now homeowners, according to the stats, the joint lowest figure since 1996. With many experts predicting that house prices will continue to rise in 2016 it could be even harder for those under 30 to get on the property ladder in the coming year.
Priced out of the market
1999 represented the peak of home ownership amongst young people with almost 63% of those aged between 20 and 30 owning a property. However, it’s steadily fallen since then, with the biggest falls coming after the financial crash of 2008. This means that less than half of young people now own their own home.
And statistics from the Royal Institute of Chartered Surveyors (RICS) suggest that the situation could get even bleaker for under-30s as house prices are predicted to be strong throughout 2016, rising as much as 6%. This is likely to mean that for those struggling to save up for the deposit on a home will find it even harder to afford a property as prices continue to increase.
Rents are also forecast to increase by 3% over the next 12 months, meaning that those trying to save up will have less to put away each month towards their property dreams. This could make it even harder for these young people to ever be able to afford their own home.
How young people could buy
If you’re a young person and you’re hoping to be able to buy a property in the near future, don’t let this news get you down. There’s still a few ways you could get some help with taking that first all-important step onto the property ladder.
Help to Buy ISAs are one way you could save up for the amount you’d need to buy a house. They’ll help you to save up a maximum of £200 tax-free every month, with the Government topping this up with another £50 when you eventually come to buy a property. The maximum amount you’ll be able to save is £12,000, which would give you £3,000 from the Government. A few of the major banks and building societies are currently offering good rates on these Help to Buy ISAs, so it could be worth opening one to save up.
To give you that extra push if you’re close to being able to afford to buy, you might want to think about moving back home to live with your parents for a bit. We know this might not be the ideal situation, particularly if you’ve been renting on your own for a while. However, it could help you to save a lot each month in bills which you could then put towards a housing deposit – and maybe being back under your parents’ roof could help to give you the extra incentive you need to save up and buy your own home.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.