Millennials are living in an age, described as ëGeneration Rentí, where buying a property is proving to be a struggle. The current situation for first-time buyers is tricky because the growth in house prices is rising steadily across the UK, making saving up for a deposit extremely difficult. Despite the facts, millennials are still eager to try and get on the property ladder, as recently discovered in a survey conducted by NatWest.
Lack of Understanding
Not understanding how the housing market works is one reason why many young people find parts of the house buying process to be confusing. The survey highlighted millennialsí common misunderstandings when asked about the property market. Worryingly, only a fifth of millennials found the mortgage process to be simple and 41% stated they did not know how much deposit was required.
Millennials are more likely to rent than previous generations before them, however 53% did not respond ëagreeí or ëstrongly agreeí when asked whether they were experiencing ëGeneration Rentí. This optimistic outlook may be due to the fact that many are not fully aware of the facts around the housing market. Millennials nevertheless do voice some concern before they think about buying a property. The issue that ranked first in the survey was concern around their financial situation. For young adults who pay rent, trying to save up for deposit can prove to be challenging, with 45% of millennials saving less than a fifth of their salary in total.
What Can They Do About It?
With first-time buyers lacking housing knowledge and having concerns about issues such as their finance, the question is, what exactly can done about it? There are many schemes that can help to get first-time buyers onto the property ladder. The governmentís ëHelp To Buyí scheme helps out those who are struggling to save up for the initial deposit on a house. The scheme enables first-time buyers to purchase a home with just 5% deposit, with the government guaranteeing 15% of the value of the mortgage for the lender. As this enables young adults to put a deposit down with significantly less money, it comes as a surprise that 33% of those interviewed were unaware of the program.
Itís as vital as ever that millennials do the required research before they buy a property. Those who rent will have to find a way to budget and save up so they will be able to afford a deposit. For those millennials ready to buy, to avoid making mistakes during the process, they will need to ensure they are well informed on the housing market and all the options available to them.
Nonetheless, many millennials are undeterred by the notion of ëGeneration Rentí as well as the commonly reported idea that they will not be able to own their own home. Many more (44%) felt optimistic as a result of finding out about the ëHelp to Buyí scheme. This indicates that millennials are still determined to own their own property and with the appropriate help at hand, they can be more successful when doing so.
For millennials looking for further information, see NatWestís millennials home buying survey here.