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COMMENT
A new housing report may reassure homeowners and potential homebuyers who are worried about the long-term demand for residential property. In November, UCB Home Loans, a specialist lending subsidiary of Nationwide BS, asked 1,080 16-21 year olds about their attitudes and future ambitions as regards housing. This survey revealed the following: Who wants to be a homeowner? More than nine in ten young people (92%) aspire to own their own home, rather than rent. Furthermore, almost nine-tenths (89%) think that they actually will own a property at some point. This figure was slightly higher among young people in education (91%) than for those in employment (87%). Perhaps this is because the workers have already seen how much disappears between the first and final figures on a payslip! The reality Currently, only seven in ten homes (70%) are owner occupied, which means that around 18 million people live in private rented or social housing. Unless this proportion rises dramatically in the next, say, fifteen years, a lot of these young adults will be renters! How old will you be when you buy your first home? Two-thirds of young people (66%) believe that they'll buy their first property between the ages of 25 and 30, with the average age being 27. The reality The latest figures from the Council of Mortgage Lenders show that the average age of a first-time buyer has increased steadily in recent years, and is 34 at present. Crikey, I bought my first house in 1992 when I was a mere boy (24, to be precise), as did many of my friends and acquaintances. How things have changed over the past thirteen years: a nine-year house-price boom has prevented many people from becoming homeowners nowadays. How much will your first home cost? Almost half (48%) think that their first property will cost up to £150,000; another 43% think it will be between £150,000 and £300,000, and one in twenty (5%) believes it will cost £301,000 to £500,000. Almost a quarter (24%) would like to live in a mansion in its own grounds, but only 1 in 33 (3%) thinks that they'll ever be able to afford this. (Even 3% sounds wildly optimistic to me -- after all, how many mansion owners do you know?) The reality According to the latest housing survey from Nationwide BS, the average UK home now costs more than £157,000, with the average price for first-time buyers being over £128,000. If house prices continued to grow at their long-term average of around 8% a year, these young people will be in for a shock when they come to buy in ten or fifteen years' time. For example, fifteen years ago, a typical home cost just over £54,000 -- a mere third of today's average price! Will you live in the UK or abroad? While young people are very keen to own property, close to a third (32%) said that they would prefer to leave the UK and live abroad. The reality UCB Home Loans believes that a fair number of these aspiring migrants could achieve their dream, as over 208,000 Brits (about 0.3% of the UK population) moved aboard in 2004 alone. So, although the above figures are a testament to the ambitions of young people, unless property prices return to sensible levels over time, millions of these aspiring homeowners will come down to earth with a bump! More: Find a happier home loan in our Mortgage centre | Avoid interest with a 0% credit card!
