A study has revealed that young adults aged 18-30 are struggling to get on the property ladder due to the lack of available credit and rising housing prices.
The study carried out by Joseph Rowntree Foundation looked into what the property market will be like in 2020. The results of the findings were that many young adults will be forced to rent and in some cases many will not be able to afford their own home.
Seven years ago the housing market was very different to what it is today. The option of a 100% mortgage was available, requirements for a mortgage were not as strict as they are now, the UK were not in a recession, housing prices were lower and employment was higher. Taking into consideration all these factors young adults are now faced with the prospect of saving at least 10% of the property price for a deposit which can cost around £8,000 - £10,000, house prices are at an all time high and mortgages are not as easy to secure.
As it stands nearly 2.4 million people aged 18-30 are living in privately rented accommodation, the study predicted that by 2020 this will increase by 1.5 million and 200,000 will still be living with their parents.
Council of Mortgage Lenders have also carried out a study on young homeownership finding that 81% of young adults hope to be a homeowner in ten years time and 74% aspire to own a home in two years time.
Bob Pannell, CML chief economist, commented: “The results clearly show that the British love affair with home-ownership is far from over. But achieving the home-ownership dream has become more difficult for people, and is likely to remain so, especially for the young.
“We need to ensure that good quality housing is available in a variety of different tenures, and that the growing private rented sector represents an attractive choice for those who do not want, or cannot attain, home-ownership. However, we also need to recognise that for the overwhelming majority of people, home-ownership is still the ultimate goal.”
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By Amanda Bainbridge