Younger homeowners are resorting to desperate measures to realise the dream of buying their home. Seven in ten homeowners aged 25-34 have relied on finance options that include: longer term mortgages of over 25 years, the bank of Mum and Dad, low interest mortgages, small deposits, interest-only mortgages and government schemes such as Help to Buy.
According to findings of the 2014 Homeowner Survey by HomeOwners Alliance and myhomemove, younger homeowners are resorting to desperate measures to realise the dream of buying their home. Seven in ten homeowners aged 25-34 have relied on finance options that include: longer term mortgages of over 25 years, the bank of Mum and Dad, low interest mortgages, small deposits, interest-only mortgages and government schemes such as Help to Buy.
Among young homeowners (aged 25-34) who have relied on affordable financing options to help them buy their home, half say they are worried about their housing debt. In particular, 23% say they worry about the size of their mortgage and being able to repay it one day, 20% say they worry about negative equity and 19% say they worry about their monthly mortgage payments over the long term.
While these financing options help many young people afford to buy their first home, they may also be storing up future problems and financial worries.
Key findings of the 2014 Homeowner Survey, conducted by YouGov, include:
- Younger homeowners are more likely to use affordability finance options to buy their home (including low mortgage rates, loans from friends and family, extended mortgage terms of over 25 years, low deposit to mortgage value and government/ shared ownership schemes like Help to Buy). 72% of young homeowners (aged 25-34) say they used one of these finance options versus 62% of UK homeowners overall
- Younger homeowners are more likely to rely on extended mortgage terms, loans from family and friends, low deposit to mortgage value and government/ shared ownership schemes to help them buy:
- 28% of young homeowners (aged 25-34) say they have an extended mortgage term of over 25 years (vs 17% of UK homeowners overall)
- One quarter (24%) of young homeowners (aged 25-34) say they borrow from family or friends (vs 11% of UK homeowners overall)
- 23% of young homeowners (aged 25-34) say they have a low mortgage rate/ deal (comparable to the level indicated by UK homeowners overall)
- 12% of young homeowners (aged 25-34) say they have a low deposit to mortgage value (vs 8% of UK homeowners overall)
- 10% of young homeowners (aged 25-34) say they have used government/ shared ownership schemes like Help to Buy (vs 4% of UK overall)
- 49% of young homeowners who have used affordability finance options to help them buy worry about their housing debt vs 30% of all UK homeowners who have used affordable financing.
- Of young homeowners (aged 25-34) who have used affordable financing to buy their home, 23% say they worry about the size of their mortgage and being able to repay it one day, 20% say they worry about the size of their mortgage in relation to the value of their home and 19% say they worry about their monthly mortgage payments over the long term.
- Interest rate rises are a particular concern with more than one in three (34%) UK homeowners and one in two (49%) homeowners age 25-34 saying they fear a rise in interest rates will make it more difficult to afford payments on loans and debts
Other Related Findings of the 2014 Homeowner Survey conducted by You Gov include:
- The appetite to own your own home is on the rise (In 2014, 68% of non homeowners in the UK indicate they would like to own in the future; up from 65% in January 2013)
- However, ability for First-time buyers to get on the property ladder (87%), saving for a deposit (86%) and house prices ( 77%) are top housing concerns nationally
- House prices are of particular concern for those who aspire to own (Among potential first time buyers, 52% say house prices are a very serious problem compared with 39% of UK adults generally)
Paula Higgins, Chief Executive of the HomeOwners Alliance, the UK consumer group championing homeowners, says: “As house prices rise and homeownership levels drop, young people are left with no choice but to resort to desperate measures to realise their dream of owning their own home. This goes to show how the housing crisis is giving young people a raw deal. Schemes to help make homes more affordable in the short term do little to solve the fact that we need many more new homes, in the right places and at the right price.”
Doug Crawford, CEO of myhomemove, the UK’s leading conveyancing provider, says: “Our own data shows that over the past year, the average deposit size has decreased by 1.2% despite house prices rising by nearly 8% – just showing how much schemes like Help to Buy are having an impact, especially outside of the capital. For first time buyers, those likely to be aged 25 – 34, this is a double edged sword; yes it helps them onto the property ladder but there is a real danger that unless they have bought a home they can grow into, they will become trapped as market prices outpace them or a future downturn puts them into negative equity.”
Use of Affordability Financing Options to Buy Main UK Home
‘Affordability’ Financing Methods Used To Buy Main UK Home (UK Homeowners vs Younger Homeowners)
‘Affordability’ Financing Methods Used To Buy Main UK Home (by age of homeowners)
Financing Methods Used To Buy Main UK Home (Regionally Among Homeowners)
- Regionally, a higher proportion of homeowners in the East than among UK homeowners overall indicate that they have a low interest rate mortgage (30% vs 23%) or an interest only mortgage (29% vs 23%)
- Homeowners in Scotland are slightly less likely to have an extended mortgage (over 25 years) than UK homeowners overall (12% vs 17%)
Financial Concerns (Among UK Adults)
Possible Financial Worries Associated with use of Affordability Financing Options
Worries Associated with use of Affordability Financing Options (by age of homeowners)
Worries Associated with use of Affordability Financing Options (By Region)
- Regionally among homeowners who have used affordable financing options, those in the East are most likely to have financial worries. In particular, monthly mortgage payments are more likely to be a worry (26% in the East vs 16% in the UK of those who used affordable financing options say they are worried about keeping up their monthly mortgage payments over the long term).
- Those in Scotland are least likely to have financial concerns associated with the financing they used to buy their home. 54% of Scottish homeowners who used affordable financing compared with 44% of UK homeowners who did so are confident they can manage their monthly mortgage payments and have a plan to repay their mortgage.
Housing Concerns (Among UK Adults)
Housing Concerns (Among Aspiring Homeowners)
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Notes to Editor
2014 Homeowner Survey
All figures in the 2014 Homeowner Survey, unless otherwise stated, are from YouGov Plc. In 2014, total sample size was 2,527 adults of which1,606 were Homeowners. Fieldwork was undertaken between 18th-20th March 2014. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
The 2014 Homeowner survey was made possible through sponsorship by myhomemove, the UK’s leading conveyancing provider and TrustMark, the Government endorsed ‘find a tradesman’ scheme.
- Part 1 of the survey, “Concerns about house prices spread across UK as housing market gathers pace” was issued on 7th April.
- Part 2 of the survey, “British homes suffer maintenance and repairs crisis because of difficulties finding trusted builders” was issued on 12th May.
- Part 3 of the survey asks: “Interest rate rise could push millions of homeowners into financial difficulties” was issued on 23rd May.
- In relation to affordability financing options, we asked which, if any, of the following types of finance have you ever used to help you buy your current main home in the UK and to indicate all that apply (list provided). Among those who had used one of the listed methods, we then asked which, if any, of the following apply to you? (range of possible financial worries including not worried)
April 15, 2024 
