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Have we lost a generation?
15 September 2020
Welcome to September…
I keep asking myself where this year has gone. It's certainly been one that will forever be etched in my mind but looking back, the past few months seem to have flown by.
Like me, some of you will have packed your children off to School this week, anticipation, anxiety and excitement seem to have filled our home for the past few weeks and another chapter in our family life has both opened and closed simultaneously. This in turn got me thinking about the future, like many, I often find these events trigger some sort of thought process and these days its generally centred around my children and their future.
Have we lost a generation?
Scrolling through the property internet pages I then stumbled across this article:
'Young Britons believe dream of owning home is over'
I will post the link here, (copy and paste in your browser) if you wish to read the detail.
Young Britons believe dream of owning home is over
I'm not sure how this makes you feel, but it certainly made me sit back and take a short intake of breath. The constant theme in this country seems to be that we don't have enough housing stock. Successive Governments have pledged record infrastructure changes to build all the homes we need to live in but unfortunately, and by their own admission, they've repeatedly failed to do so - at what cost?
New homes don't come cheap, you only need to look through Rightmove & Zoopla to see that 'New Builds' come with a pretty hefty premium. I've taken the liberty to look up the exact amounts for the Worthing area and it's currently (March 2020 figures) a staggering difference of 19%. So, who are we building all the new homes for and why?
The article suggests that 91% of the young people surveyed still aspired to own their own property, however they felt that it was now an unrealistic expectation in their lifetime. To give some balance the term young people refers to anyone aged between 18 – 34. Whilst sitting here writing this, I'm still pondering how we have created a model where the simple aspiration of home ownership has been abandoned by a whole generation.
This led me to thinking…
How do we as Property Professionals break down all the elements to offer some simple yet practical advice for those looking to purchase their first home. There is a wealth of resources on the internet from Help to Buy, mortgage calculators, Property ISAs and article similar to this seemingly offering the hopeful buyer an array of options and advice, but to me anyway, it all seems a little confusing. Many of us who can recall purchasing our first home will no doubt remember how scary (and stressful!) the whole process seemed.
The property market is currently going through a spell of increased activity. In my humble opinion, this isn't sustainable for the long term and there's no doubt that thousands of people have brought forward their moving plans to take advantage of the reduced stamp duty. But, with house prices hitting all-time highs and properties sometimes being snapped up within days of hitting the market, it certainly doesn't seem that anyone looking to get their feet on the ladder is having an easy time of it.
With lending criteria almost changing on a daily basis, its now far more difficult to source 90% loan-to-value mortgages. The majority of lenders have pulled or suspended these products. So, with first time buyers having to stump up larger deposits, where is the additional money coming from? It's been pretty well documented that for a number of years now the 'Bank of Mum & Dad' has been the number one source of deposit funding. Some parents have even looked at equity release schemes on their own property to help fund that of their children's. However, it appears we are likely to see a change in these cash exchanges because there has been a rise in lenders capping parental donation to 25% of the total deposit.
Sorry if I'm painting a bleak picture, but I suppose this is reflected in the original article and why the belief of home ownership feels so distant or unrealistic to the younger generation.
So… How can we help?
The best piece of advice I can offer to anyone looking to get on the property ladder is to get your finances in order prior to searching for your new home. Speaking with a good local Mortgage Broker is the best place to start. Just going to your current bank limits you solely to their product range and criteria, which could cost you thousands of pounds and cap your borrowing. Understanding how much you can borrow, and what this will cost you on a monthly basis, will help dramatically with your search and in deciding if you want to spend more per month to secure the property you love.
Other things to consider when looking for property are stretching your search area. We all have an idea of the perfect location, unfortunately in many cases it comes with a hefty price tag, so you'll often find better value by shifting you search criteria and widening your options. This is also true when looking at property sizes. Sometimes it's worth considering smaller properties with the scope to extend to meet your needs over time. Estate Agents don't come at the top of everyone's popularity list, but we are certainly here to help. It's worth taking the time to register directly with us and others in the town, this way, you can generally find out about properties before they are listed on the internet. Setting up alerts on the property websites is a pretty simple thing to do these days and a great way to keep up to date with what's coming on to the market.
We very much believe in the personal touches, so if you have any questions or would like to discuss your requirements in detail, then please give us a call and we'll be more than happy to help, point you in the right direction and even recommend the expertise of others who we believe can offer you some guidance. Although we can't change the situation, we can certainly give you the best possible platform to help you on your journey.
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