A new survey has shown that half of British parents see no chance for their children to own a home without financial help, such as an inheritance. This news comes to no surprise for many Brits, who have seen property prices soar in recent years and mortgage lending become more difficult.
The survey from YouGov research highlighted the struggle that the younger generation face. It showed that 49% of Brits believed their children will need money from them to get on the property ladder. This is supported by research from the English Housing Survey, which showed that home ownership among 25 to 34 year olds has fallen considerably in the past decade, from 59% in 2003 to 36% in 2013.
The younger generation worse off in all areas?
Many younger people might see that this is just one issue facing their financial future which seems a major struggle to overcome. Other areas which younger Brits may struggle with is buying a first car, affording medical expenses or saving money for a rainy day. Employment levels have been low as many young people pour out of university with a good degree but with very little pick of jobs.
Taking out cash loans
Citizen’s Advice finds that the cash loans offered by giant brands like Wonga, account for 62% of credit used by 17-24 year olds. The news report in The Guardian found that debt amongst the younger generation is more worrying now than ever before and the younger people find cash loans useful in bridging the gap between incoming and outgoings where required. Citizen’s Advice chief executive, Gillian Guy said, “Generation Y is fast becoming generation credit.”
Looking to the future
Cash loans can be helpful when younger people are struggling to make ends meet, if they can responsibly repay the loan. It is hoped that with the General Election coming up, a new personal income tax allowance will be granted which means that more younger people have more money leftover before they must pay tax. It is also hoped that people who are really struggling get help from Debt charities, such as Step Change, before things get too out of hand. Ignoring the problem can only make things worse in the long run.
As for affording your own home? There are no quick fixes. If lucky enough to receive a lump sum inheritance, getting the deposit together to afford a mortgage will be much easier. For those less likely to get their hands on such a large chunk of money, slowly saving a small amount each month is a start. Teaming up with friends to afford a property might be an option.
Also, it is worth considering shared ownership options where only 5% deposits are required. Thames Valley Housing Association is one example of a shared ownership charity that can help younger people get on the ladder with more affordable homes at a split rent/mortgage cost.