A recent survey conducted by NatWest looked at how Millennials feel about buying their first property, getting onto the property ladder and the idea of “Generation Rent”. The results make interesting reading 
With the ever-increasing rise in property prices, Millennials (defined by the survey as 22–30 year olds) are living in an age the media has labelled “Generation Rent”. In fact 47% of the 1500 Millennials surveyed felt that they were indeed experiencing “Generation Rent”, and a further 78% believed that the wider UK economic conditions had negatively affected their chances of becoming first-time buyers.
A lack of affordable properties has forced house prices up and now countless young potential-buyers have had little choice but to rent properties for longer periods of time. This has prevented many from saving up for a large enough deposit to purchase a property of their own. For young adults trying to purchase their first property in this challenging climate, a lack of housing and mortgage knowledge could – the survey results suggest – be cause for confusion.
The NatWest Millennials Home Buying Survey looked at key topics around Millennials’ understanding and their current situation when it came to property, deposits, financial advice and the mortgage process.
Key take-outs:
- Only 17% of Millennials are currently looking to buy a property.
- 47% would want to purchase a property to get onto the property ladder.
- 47% stated that their biggest concern when purchasing their first property would be their financial situation.
- Only 20% found the mortgage process to be simple.
A lack of knowledge
One of the most telling insights that the survey highlighted was the significant lack of knowledge amongst Millennials around issues fundamental to buying a home. Only one in five Millennials said they found the mortgage process simple, with 50% finding it “difficult” or “very difficult”. For first-time buyers seeking property advice, thoroughly understanding the way the mortgage process works from the start is essential to avoid confusion in the future.
As well as not understanding the overall home-buying process, there was little consensus amongst respondents around the topic of deposits. 26% of the 22–30 year olds surveyed thought that they would need a deposit of over 20%; 35% put the necessary deposit level between 6% and 10% (in fact the national average for first-time buyers is 17%, according to Which?)
In fact the Government’s Help to Buy scheme can allow buyers to get on the property ladder with a deposit as low as 5%. However, while the majority (67%) of the Millennials surveyed have heard of the Help to Buy scheme, only 22% know how to apply for it. A lack of knowledge could even be undermining wider efforts to make it easier for first-time buyers to get on the property ladder.
While the survey did show that Millennials remain optimistic around buying a property (69% believe they will have saved enough for a deposit within five years), the chances of these aspirations becoming reality will only improve if this knowledge gap is closed.
To see a summary of the results of NatWest’s Millennials Home Buying Survey, see here (NatWest). For the survey questions and closer analysis of the results, see here (NatWest).