Do first time buyers lack the mortgage knowledge they need?
In the age of ‘generation rent’, millennials who are looking to buy their first home can struggle to understand or find the right information about the housing market. Many young adults seek financial advice and many find the home buying process to be unclear.
There are many factors that millennials are faced with when they consider purchasing their first property. Their biggest concern is their financial situation, followed by mortgage payments and then the fluctuating house market. A survey conducted by NatWest revealed exactly how young people view the housing market and the prospect of ‘generation rent’. The key insights of the survey explain millennials’ current circumstances and future intentions, as well as their attitudes towards the housing situation. The survey also revealed that there was a lack of understanding around the housing market and Government home buying support. The fundamental statistics produced were that 40% of millennials rent with a partner. Those renting with their partner are more likely to be actively looking or browsing for a property. On the contrary those who live at home are less likely to be looking for properties.
Regional differences revealed that Londoners are more likely to live with their parents, either paying rent or rent free. Londoners living at home are under the impression they cannot afford a deposit on a first home before the age of 30. However, across the board, 69% believe they will have saved enough money for a deposit in the next 5 years. Many subscribe to the idea that Britain is encountering ‘generation rent’. 47% feel their financial situation will be their biggest concern. Those looking to buy a property usually seek financial advice from banks, followed by friends or family then seeking advice online. However, over half of those millennials would need further assistance with their finance support. Optimism with millennials is high, even though some lack understanding about the housing market. In fact, 55% would consider buying a property if the mortgage was cheaper than renting. This is in conjunction with the hope of getting onto the property ladder.
For further information see NatWest’s Millennials Home Buying Survey here.