How times have changed, with Millennials and Generation Z showing less interest in the traditional norms of western society, such as laser-like focus on the work/life balance or eschewing the extended tan session of a classic beach holiday where you never leave the resort in place of experience-driven trips.
Now it looks like this phenomenon has spread to the UK housing market, with new research from price comparison website MoneySuperMarket showing that the usual characteristics of a first-time-buyer have begun to change with the total number of people getting on the property ladder dropping by a whopping 45% since 1994. So what are they doing with their cash?
According to the research data, 42% of the 18-25’s surveyed said that they put saving for a holiday above anything else, including property. In fact, 25-34 year olds consider saving for travel and holidays equally as important as saving for a property deposit. While 34% of Brits are saving for holidays and travelling, only 19% are currently putting their savings towards home ownership.
This could be because getting on the property ladder has become more difficult over the last 20 years, with the average annual salary now accounting for only 11% of the average house price in 2018, compared to 23% in 1999. 16-24-year-olds have been particularly affected, with a 68% decrease in first-time buyers in this category between 1981 and 2016.
“We’re seeing a shift towards renting”
Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “What used to be affordable 20 years ago now requires a significantly greater investment and, as a result, we’re seeing a shift towards renting and a change in attitudes towards savings.
Pratt went on to say: “Anyone trying to build a deposit to put down on a property needs to make sure they are squeezing every last drop from their savings, whether that be in a savings account or in an individual savings account (ISA), where you could be eligible for a government bonus to help you on your way. It certainly pays to research what’s available to ensure you’re getting the best rate of interest.
The same applies to mortgages. The bigger your deposit, the better but for those without money to put down, some lenders are offering loans of 100% of the property’s valuation. Whatever the mortgage you’re considering, make sure you look at what your monthly repayments would be to ensure you don’t overstretch yourself.”