Owning a home is one of the main goals in most Brits lives. Younger people scrimp and save but still struggle to buy their first home. With more than 27 million residential properties in the UK, you’d think getting a mortgage for one to be easy. Unfortunately, this is not the case. There are several major barriers that prevent young people from qualifying for a mortgage.
These reasons include saving enough for a deposit which has been made harder with rising costs of living. Whilst juggling a lower wage with rent, bills and other factors, saving for a deposit on a house is no small feat. Without a high income too, banks may be reluctant to approve a mortgage.
These limiting factors are only the beginning of the struggles to get on the property ladder. Here is a full insight into the problems young people are facing as they try and buy their very first home.
House pricing
The average house price in Britain is £176,759. A £37,000 increase from two years ago. These increases have come from a lower supply than demand for properties. This leads to bidding wars on houses which usually drives the price even further up.
This increase combined with rising interest rates is making it virtually impossible for any new buyer to complete the purchase.
House buying process
The house buying process is another factor that makes it difficult to become a homeowner. It can be a long and arduous task that can lead to many prospective buyers walking away. Here are all the costs involved in buying a home.
- Deposit
- Mortgage fees
- Stamp duty
- Valuation fees
- Surveyors fees
- Legal fees
Costs after purchase
Once the house is purchased, there are other costs to contend with alongside your mortgage. These can take up a large portion of your salary so should be taken into account before buying a home.
- Home insurance
- Removal fees
- Household bills
- Maintenance and repairs
Is it better to just rent?
For many, renting is the only option for their living situation. It’s not all negative however which is why many European countries prefer a renting model of housing. Renting brings with it many positives including:
- Not getting tied down to one locality
- No financial baggage from a mortgage
- Convenience
For many young people who are focussing on their careers, renting just makes sense. They can agree to sign for a house for a year and then won’t have to worry about it again until it’s time to find a new place. Renting is also a great option for living with friends. This can subsidise much of the cost and you won’t be lonely.