Nearly half of non-homeowners believe that they will never make it on to the housing ladder, according to new research.
The research, which was carried out by the wealth management firm Close Brothers, revealed that 47% of people in full-time employment cannot see themselves getting on the property ladder any time soon, with 65% still seeing homeownership as a long-term ambition. The majority of respondents who were struggling to get on the housing ladder were millennials beginning to consider buying their own property.
According to the Office for National Statistics, the average house price in Britain has risen by 270% in the past two decades, which in turn has pushed the average age of people buying a property back by at least eight years since 1997 and putting the prospect of owning a property completely out of reach for many.
The research also revealed that a quarter of people in full-time employment spend more than half of their monthly income on housing costs and one in 10 are spending 70% of their income on rent and bills, which makes saving up for a deposit nearly impossible for a lot of renters.
The research also revealed that a large portion of employees do not understand how to get on the housing ladder - approximately four in 10 said that they wouldn’t know where to start when it comes to buying a house.
Jeanette Makings, head of financial education at Close Brothers, said: “A huge proportion of peoples’ salaries are going on housing costs. This makes saving for the future more difficult and contributes to the scale of uncertainty when it comes to taking the first step onto the property ladder.”
She also believed that people, especially young people, need more education on how to manage their finances and savings.
Educating people on their finances is all very well, but we can’t ignore the fact that it’s still exceptionally difficult for people to get on the housing ladder in the current climate, and many have turned to renting as a long-term living solution.
The government is struggling to meet its house-building target, so there is a supply and demand issue for affordable residential properties. Naturally, this means that there will be a continuous demand for rental accommodation which is to the benefit of buy to let investors.
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