More young homeowners are likely to be burdened with longer term debt and financial worries than previous generations
Younger homeowners are resorting to desperate measures to realise the dream of buying their home.
June 9, 2014
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.
Use of Affordable Financing Options to Buy Main UK 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.
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.”
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