For lots of us, it feels like you need to be pretty tall to get onto the so-called ‘property ladder’ in the first place. And it’s not just your imagination that makes it feel like that – it’s a fact. Recent findings have shown that the proportion of 25 year olds who are homeowners, has almost halved compared to 20 years ago when 46% of this age group owned their own home.
In fact, just a lucky 20% of 25 year olds today, can call themselves the kings or queens of their own castle. Of course, for most people the reason for not owning their home is the hefty price tag that comes with the average house. If you decide to buy outside of London, then a deposit could set you back 62% of your annual income and inside London will cost you a staggering 131% of your yearly salary.
So, with average house prices 7.9 times more than average earnings is it any wonder that 25 year olds still rent or live with mum and dad? And the future doesn’t look any peachier despite house prices being predicted to slow in 2017.
Historically, there haven’t been enough new houses to cater for demand and although the number of properties sold in some areas is lower compared to last year; demand still outstrips supply overall. And the average first-time buyer property is now more than £200,000 outside of London and £400,000 in the capital.
But it’s not just private renters that the housing shortage affects – it’s social housing too. Just 6,550 homes for the social rental sector were built in 2015 and 2016 – a drop of 88% compared to 20 years ago. So, what’s the big deal? Well, local councils reckon that by 2024 just under four million people will need some form of affordable housing – and at the moment there just isn’t enough to go around.
Of course, the answer is that more houses need to be built which is far easier said than done. But if you’re more concerned about getting onto the property ladder in the here and now then you’ve come to the right place. Have a look at our tips for first time buyers to see what you need to do to take that first step.
At comparethemarket.com, we’re not just a comparison site for mortgages and home insurance, we’re here to support you too. So, whether you’re actively saving, remortgaging or if home ownership is still purely hypothetical – check out our mortgages hub and see how we can help you when you comparethemarket.com