A third of young people will never own their own home and are faced with renting for the rest of their lives. Those born between 1980 and the mid 1990s will still live in rented accommodation at the age of 30. A report by Resolution Foundation has found that 1.8 million families with children are also renting – up from 600,000 fifteen years ago. Over recent decades, the British housing problems have increased and young people are now bearing the burnt of this.
What is the cause of this issue?
Millennials are finding it very difficult to get on the property market due to house prices increasing faster than their earnings. As a result of the recession in 2008, mortgage criteria has been tightened with young people having to pay larger deposits than previous years. These youngsters are finding themselves caught in a vicious circle. Efforts to save for a deposit are proving difficult due to a high proportion of their income being spent on rent.
Who does this affect?
The first time buyers wonder will they ever make it on to the property ladder. The Resolution Report highlights children who have been reared in rented homes, lacking the security of a long term home. The report also discusses the increasing number of people who are still in rented property when they retire.
What is being done to resolve it?
The Government has introduced a number of measures for first time buyers assisting them with the purchase of their first home.
Help to Buy scheme is a flagship initiative which helps people purchase a new build home with a five per cent deposit and the Government providing a twenty per cent equity loan. The Help to Buy ISA also aids people save for a deposit by allowing them to set aside £200 a month tax-free. The Government will increase this with a bonus of twenty five per cent of the total amount saved, up to a maximum of £3,000 on savings of £12,000, when they buy a house.
The Starter Homes Scheme allows people aged between 23 and 40 who have not previously owned property to buy one at a twenty per cent discount to the market price, while under shared ownership, buyers can purchase a share in a property of between twenty five per cent and seventy five per cent.
It was also announced in the recent Budget that first time home owners will not have to pay stamp duty on the first £300,000 of a property purchase.
For long term tenants & first buyers queries
Our expert team in the Henry Wiltshire Hayes office are there to guide tenants and first time buyers, contact us today.