The number of young people who have no intention of buying a first home doubled from 2012 to 2013, up from 5 to 10 per cent, according to the latest annual Post Office House Buying Habit report.
Conversely, the number of 18 to 34 year olds surveyed who were looking to buy a first home remained similar year on year, suggesting a widening gap in opposing aspirations.
However, the number of would-be buyers prepared to make compromises to get on the property ladder fell in the past year, suggesting a renewed sense of consumer confidence amongst this segment of the market.
Top five compromises potential homeowners aged 18 – 34 are willing to make:
|
2012 |
2013 |
|
| Not having a property that is fully ‘ready to move into’ |
40% |
44% |
| Not buying new furniture and appliances |
40% |
33% |
| Not living in a trendy area |
38% |
35% |
| Not having original features in the property |
37% |
37% |
| Not living close to family |
29% |
26% |
Would-be buyers are still open to the idea of a ‘starter home’ which requires further work (44 per cent) before they are fully satisfied with it. However, location remains a priority; the number who would sacrifice living in a trendy area has fallen from 38 per cent to 35 per cent, while the number who would consider moving away from family has fallen from 29 per cent to 26 per cent.
These compromises vary across the country. Londoners, with their tribal loyalty to north or south of the river, live up to their reputation with only a quarter (25 per cent) of those living in the city willing to reconsider living in a trendy location (compared with 35 per cent nationally).
John Willcock, head of mortgages at Post Office, said: “For many people owning their own home is a dream they are determined to make a reality, and our report highlights the lengths some will go to. Since the recession in 2008, people have taken extra steps to save money for a deposit. However, the launch of the Government’s Help to Buy scheme and a raft of affordable loans on the market look to have rallied optimism amongst first-time buyers.”
The survey reveals that young men and women have different motivations for getting on the housing ladder. Of those young women looking to buy, 30 per are driven by the desire to settle down and 30 per cent are tired of renting – while young men consider buying property a good financial investment (29 per cent).
In addition to the compromises some buyers are willing to make, many are also prepared to streamline their lifestyle to save for a deposit. However, the number who would consider this has gradually fallen year-on-year.
Food and fun are the first things to go, including takeaways (57 per cent) and going out at the weekend (51 per cent). Furthermore, 43 per cent say they would consider cutting back on their weekly food shopping. When pushed to it, more than one in ten (14 per cent) would forego saving into a pension in order to put a little more aside for a deposit.
Top 10 sacrifices young home-owners would consider making:
|
2012 |
2013 |
|
| Takeaways |
59% |
57% |
| Not going out at the weekend |
51% |
51% |
| Not going to restaurants or bars |
54% |
50% |
| Making own lunch for work |
56% |
50% |
| Not buying new clothes/shoes |
51% |
47% |
| Cutting back on weekly shop |
47% |
43% |
| Not going on holiday |
42% |
43% |
| Giving up morning coffee |
44% |
42% |
| Buying second hand furniture |
36% |
41% |
| Giving up the gym |
43% |
32% |
John Willcock continued: “While older generations are likely to have purchased a home at a young age, today’s 18-34 year olds find themselves in a very different position; counting every penny in order to acquire those essential property pounds.
“At the Post Office we want to do all we can to help young people who are saving to own their own home. Our broad range of products, some of which only require a 10 per cent deposit, are designed to suit every possible situation and ease the difficult financial burden that can come with purchasing a new home.”
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