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One-Quarter of Young Aspiring Homeowners Relying on Inheritance to Buy First Home

Research has found that nearly 25% of young Britons who do not own a home are hoping that an inheritance will help them onto the property ladder. The same percentage believe they will never be able to buy their own first property, never mind climb further up the property ladder.

485 of survey respondents believe that it is more difficult than ever to get on the property ladder, and nearly one in five said they would consider leaving the country to buy a home of their own.

One out of seven younger aspiring homeowners believe they will be renting for the rest of their lives. Two-thirds said their income is not high enough to buy their own home.

A variety of government schemes have been announced in recent years to help UK residents onto the property ladder, such as the Lifetime Isa and Help to Buy, the former of which will be launched in April. A housing white paper has also been released to help renters and home buyers.

The English Housing Survey recently released figures showing that in England, one in five households is living in private rentals, while private home ownership is at a 30-year low.

Home ownership came in at 62.9% in 2016, down from 63.6% the year before. It is the lowest percentage since 1985 and eight points lower than its 2003 peak of 70.9%

Structural Defects Insurance

Halifax housing economist Martin Ellis said that many young Britons feel that by going through the process of saving for a deposit, finding an affordable home in a desirable area, and covering their living costs, they are running a type of financial gauntlet.

Mr Ellis said that it is never too early to research the factors that go into affordability, the borrowing options at one’s disposal, and determining what’s achievable to make property ownership more attainable.

Approximately 1,500 people aged 18 to 34 participated in the research.

Below are some tips for aspiring homebuyers:

  • Use calculators and related tools that allow you to determine how much you could potentially borrow, how big a deposit you would need, and what the monthly payments would amount to.
  • Review your mortgage options with an adviser. Some lenders allow new homebuyers buyers to borrow up to 95% of the home value, or you may need to have someone act as guarantor for the mortgage.
  • Research any incentives or schemes that could make buying a home in your chosen area more affordable, such as a shared equity plan.
  • Put together a money plan that lays out how much you will acquire for monthly costs to help you determine the type of mortgage you can afford.
  • Check your credit score a year before applying for a mortgage and monitor it regularly.

 

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