Some of us may be lucky enough to be jetting off somewhere exotic this summer, but did you know that Britons in general are prioritising going on holiday over buying homes?
New research by price comparison website MoneySuperMarket looks at the changing face of homeownership in the UK, focusing on how first time buyers have been affected by developments in the property market.
The number of first time buyers has dropped by 24% since 1994, with the amount of lone first time buyers marking a substantial 45% decrease.
The latest English Housing Survey from the Government assesses variations in housing circumstances – read the report’s findings in full here.
When looking at the changing face of homeownership, MoneySuperMarket found that a large portion of Brits are putting their dreams of buying homes on hold, instead using their savings for shorter-term commitments, such as holidays or travelling (43%).
In fact, just one fifth of Brits would put their savings towards homeownership, with 22% preferring to put money away for a rainy day.
This could be a reflection of the fact that homeownership has become increasingly difficult over the last 20 years, with the average annual salary now accounting for just 11% of the average house price, compared to 23% in 1999.
As a result, the demographic of a homeowner has dramatically changed over the years, with 16-24-year-olds particularly affected, as the number of homeowners within this age range has experienced a huge 68% decline between 1981-2016.
Due to the rise of house prices, larger deposit requirements and higher rental costs, Brits are finding it more difficult to save. For instance, 25-34-year-olds now pay an average of 39% more on rent than those aged 55+ did before purchasing their own homes.
The figures also reveal that there has been a 54% increase in the amount of those renting in the 34-50-year-old bracket from 1996-2016, with 60% of 35-44-year-old tenants citing a preference for renting over homeownership and 41% saying that they aren’t earning enough to be saving for buying a home.
Brits also found themselves compromising on many aspects when looking at buying homes. Most commonly, first time buyers found that they had to compromise on the size of their property (36%), while 29% had to settle for a less preferable location.
Specifically, those in the West Midlands had to make the most compromises when buying their first homes. In fact, more first time buyers in the West Midlands (42%) had to compromise on location than those in London (40%). At the same time, 48% of those in the West Midlands also had to compromise on their budgets – the most of any region in the UK.
Londoners, on the other hand, had a bigger issue with space, with 51% compromising on the size of their homes.
Kevin Pratt, the Consumer Affairs Expert at MoneySuperMarket, comments: “It can be very disheartening for prospective buyers, especially younger ones, to look at the cost of buying a house. What used to be affordable 20 years ago is now proportionally double the investment and, accordingly, we’re seeing a move towards favouring renting and even a lack of interest in saving towards a deposit.”
Indeed, another recent study claims that one third of tenants have no plans to buy their own homes, while 57% of first time buyers have underestimated the cost of buying a home.