“By the time I’m eighteen I’m going to buy my own house.” My youngest sister’s words echoed those of my own naive ones some years earlier.
Of course, in our early teenage years, neither of us had any idea of how the housing market works – the soaring value of houses, the securing of mortgages to eventually own them or that we’d be part of a generation where the idea of buying a house is almost a pipe-dream.
In fact, my sixteen year old sister is more than likely destined to join me and our peers in Generation Rent.
House prices in the UK increased by 6.7 per cent in the year up to November 2016, according to the Office for National Statistics’ House Price Index report, up from 6.4 per cent the previous year.
The 2014-15 English Housing Survey Report on first time buyers and potential home owners found that: “The average age of first time buyers has increased over the past 20 years.”
[pullquote align=”right”]“By the time I’m eighteen I’m going to buy my own house.” [/pullquote]
Those buying their own homes are now at an average age of 30; the proportion of homebuyers in the 16-24 age range declined from 23 per cent to just 10 per cent whilst those in the 35-44 age bracket rose from 11 per cent to 20 per cent.
The report also found that single first time buyers halved in 2014/15 to 14 per cent meaning that more than 80 per cent of all first time buyers couples.
This is a definitive leap from the years 1994/5 where 63 per cent of house purchases from first time buyers were that of couples and 2004/5 when the figure was 62 per cent.
A sign of the times that two incomes are needed nowadays to be in a position to buy.
Compared with figures from 20 years ago, those surveyed in the report had higher incomes and more help with funding for their deposits thanks to a combination of governmental schemes and help from family.
In 20 years, those that had help in their property purchases from friends and family has gone from 21 per cent to 27 per cent and those using inherited money from three per cent to ten per cent.
A recent BBC article entitled ‘How to own a home by the age of 25’ received criticism on Twitter because all of the homeowners featured were white, privileged and had mostly bought up north, where house prices are lower.
a) live at home for years b) move up north c) be born into wealth d) don’t work in media ever https://t.co/gvCcuOe8sS
— Ryan Bassil (@ryanbassil) February 7, 2017
BBC found 4 examples of ppl under 25 who own their own home. All white, all straight, all couples, none in London. https://t.co/U9iQwx1YhG
— Alastair Reid (@ajreid) February 7, 2017
Just one in every five 25 year-olds owns their own property, so we spoke to some of the people behind this statistic and under to gain a sense of what it takes to be on the property ladder at such a young age.
Homeowners
Max Plowman is a 23-year-old railway engineer, in 2016 he bought his first home, a three bedroom maisonette in Aylesbury, Buckinghamshire.
When asked if he used one of the government’s ‘Help to Buy’ or ‘ISA’ schemes he revealed that he didn’t, being fortunate enough to have saved.
“I’ve always had savings all my life, due to a payment issue, I eventually got the money all in one,” he said.
Max had also saved money from every job he’d had since the age of sixteen, including the proceeds of paper-rounds and a stint as a barista and lived at home as he saved for the 10 per cent deposit that he required.
“Everything came together at the right time, at the same time I got the money, a friend became an estate agent in Aylesbury, so I went for it,” he told Artefact.
He describes the process of buying a house as ‘”long winded and at times confusing” because “as a first time buyer I was very new to it, everyday there is something new to learn, fill in or have done but you just have to roll with it.”
In the long run, being on the property ladder so young has set him up nicely.
The asset of a house in the South East has become a coveted prospect in an ever-inflating housing market that divides the country, with house prices being typically lower in the north.
Plowman acknowledges his privilege at a time where many of his peers in the south east are either renting or living with parents and cites his well-paid job as one of the main reasons he is on his way to fully owning his home at a relatively young age.
“For me it was relatively easy given my job, I am lucky. The problem is most working people could save £21,000 if they bust their ass for long enough and spend money only on the essentials.
That’s not the issue. It’s your wage. Buying a house and securing a mortgage that is four times your wage and having to pay a deposit on top of that, as well as other fees is the issue.”
[pullquote align=”right”]“I am lucky.”[/pullquote]
Londoner Jade Vanriel, Youtube creator and blogger, aged 23, bought her flat around seven months ago.
In her “If I Can Buy A Home, You can Too!” video she attributes her ability to purchase to saving: “I had trouble saving over the past few years but I’ve always been a saver because I’ve always been a worker, I’ve always worked since 16,” she tells her audience.
Word like ‘Sacrifice’ and [years of] ‘saving’ enter the dialogue again here. In conversation with Artefact, she describes finding a home as a ‘journey’ albeit an often frustrating though ‘totally worthwhile’ one.
“I often got gazumped and with prices rising constantly it was very difficult to find a two-bed within my budget, which eventually did happen after some waiting,” she told us.
The Waiters
Curious to see whether owning your own home is still very much a British dream or not, especially amongst the young generation, We conducted a Twitter poll asking people aged 25 and under whether they were planning to purchase a property within the next five years:
25 and under and planning to own your own home within the next 5 years? Also looking for long term renters/ young homeowners #journorequest
— Abitha Pallett (@Abitha_Arabella) February 7, 2017
The results speak for themselves – 75 per cent of survey respondents plan to purchase their own home within the next five years and there are some who are already in the process of saving towards it.
[pullquote align=”right”]“I am probably paying more than I would if I had a mortgage.”[/pullquote]Speaking to Artefact, 25-year-old digital marketing manager and blogger at Carousel Diary, Katrina is currently saving to buy a property with her partner. She describes herself as an on/off renter for a few years.
“I wanted to escape the constraints of living with my parents, but being able to save up thousands of pounds seemed like a far off goal, so unfortunately for the time being paying off somebody else’s mortgage is my only option. But it still provides the freedom and flexibility I am looking for.”
She saves money via automatic bank transfer that “takes a set balance from my account on pay day in the hope that if I don’t see or have access to the money, I won’t miss it.”
Katrina admits renting is, in a economical sense, frustrating when she feels she could be contributing money to a mortgage. “I am probably paying more than I would if I had a mortgage,” but the challenge she says, is the securing of a deposit alone and then the subsequent costs needed to renovate homes and live whilst paying bills.
“Unfortunately my savings are minimal and that just won’t go very far!” she says.
What about renting?
As the figures have suggested, much of the younger generation are headed for a life of long term renting.
Theresa May’s conservative government have even gone as far to admit that the housing system in Britain is broken and recently released a white paper on the rental system – a move which represents in a major change from the policies of home ownership developed by Margaret Thatcher in the 1980s.
It promises greater rights for tenants, tougher sanctions on rogue landlords and changes to planning rules in a bid to encourage developers to provide a proportion of homes for ‘affordable rent’ as opposed to solely offering ‘affordable homes for sale’.
We wait with bated breath.
Renting, some argue, is just ‘throwing money down the drain’ or paying someone else’s mortgage – usually a property tycoon in your area made wealthy via governmental ‘Buy to Let’ schemes.
But there is a strong argument in support of renting in your twenties, and in an article for The Huffington Post, Charlotte Burns argues that: “Renting is not dead money because you’re buying flexibility.”
And she has a point – your twenties are a time to explore, to be a bit selfish but ultimately to figure out who you are and what you want to do with your life – the latter being something if we’re really honest, is a lifetime pursuit.
Young adults typically find themselves at transitional crossroads in their lives – perhaps they have just graduated and are pursuing job leads which they do not know where they will take them or are waiting to establish a family before purchasing a property at a more economically favourable time.
With higher proportions of young people staying in the parental home for longer these days, those that are able to rent gain enough of a sense of responsibility through the minutiae of processes it takes to maintain a household.
Paying bills, learning to unclog a hair-ridden plughole and remembering to run the hoover around the house regularly are not activities enhanced just because you’re paying a mortgage or own your property outright.
Whilst Artefact’s findings show that many want to own their home, or plan to in the next five years, there remains many barriers to actually doing so.
But on the other hand, saving for what is arguably the most expensive and one of the most meaningful purchases of your life from the day you begin working is a commendable feat for those that are able to, with or without outside financial help, at an age so young.
It all boils down to whether you’re a ‘lay your hat’ or a ‘lay your roots’ kind of person and whether you have the money behind you to do either.
Featured image by ImagesMoney via Flickr CC