When looking at the changing face of home ownership, the data finds that a large portion of Brits are putting their dreams of buying a home on hold, instead using their savings for short term commitments such as holidays or travelling (43 per cent). In fact, only one fifth of Brits (20 per cent), would put their savings towards home ownership, with 22% preferring to put money away for a rainy day rather than buying a home and 27% saving for a holiday.
This could be a result of the fact that home ownership has become increasingly more difficult over the last 20 years, with the average yearly salary accounting for only 11 per cent of the average house price in 2018, compared to 23 per cent in 1999. In fact, the demographic of a homeowner has dramatically changed over the years, with 16-24 year olds particularly affected as the amount of homeowners within this age bracket has seen a dramatic 68% drop between 1981 and 2016.
Due to the rise of house prices, larger deposits and increased rental costs, Brits are finding it increasingly harder to save. In fact, 25-34 year olds now pay an average of 39 per cent more on rent than those aged 55 and over did before purchasing their first home. The data also reveals that there has been a 54% increase in the amount of those renting in the 34-50 bracket from 1996 to 2016, with 60 per cent of 35-44 year old renters citing a preference for renting over home ownership and 41 per cent stating that they weren’t earning enough to even consider saving for one.
Brits also found themselves compromising on many aspects when looking at purchasing home. Most commonly, first-time buyers found they had to compromise on the size of their property, with 36 per cent finding this to be the case, while 29 per cent of those surveyed found they had to settle for a less preferable location.
Specifically, those in the West Midlands had to make the most concessions when purchasing their first homes. In fact, more first-time buyers in the West Midlands (42 per cent) found they had to compromise on location when buying their first home than those in London (40 per cent). 48 per cent of West Midlanders also found they had to compromise on their budget, the most of any region in the UK. On the other hand, for Londoners the biggest issue was found to be space, with 51% stating the size of the property to be their biggest compromise.
Kevin Pratt, consumer affairs expert at MoneySuperMarket, commented: “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 twenty 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.
In a positive change, insurance costs have actually dropped slightly since 2013 across building and contents, but consumers still need to make sure they’re looking for the best deals every time they choose a provider – especially with 57 per cent already concerned about the high costs of saving for a house.”
