Tiles Direct conducted a survey on what first time home buyers think is preventing them from buying their first house.
According to 38 per cent of survey respondents, the expensive rent is blocking them from saving up a deposit for a house and another 21 per cent claimed that high cost of living is stopping them from doing the same. Lastly, 18 per cent (majority of whom were women), said that lack of well-paying jobs is the biggest culprit behind their inability to buy a first house.
The burden of high rent
HomeLet says that the average monthly rent in London has reached almost £1500! Thus, it’s not shocking to learn why a lot of first time home buyers are having a hard time saving up for a deposit. If almost all of your paycheque is being used to pay the rent, what else will be left for you to save?
Campbell Robb, Chief Executive of Shelter- a housing and homelessness charity, says that generation would be forever trapped in expensive and unstable rental properties if house prices in the UK continue to outstrip the income of average people.
Is Gen Y to blame for their fate?
While majority of the respondents claim that external factors are preventing first time home buyers from buying their first house, some respondents feel like their bad financial habits are hindering them from being a homeowner.
6 per cent of respondents say that irresponsible spending habits of first time home buyers are the root cause why first time home buyers can’t buy a house. 9 per cent of respondents (who are mostly made up of 55-64 year-olds) also said that lack of motivation to save money is a serious barrier to homeownership.
Other factors contributing to the problem
People in their 60s have a different take on the problem. 15 per cent of over-65s claim that poor interest rates are actually making it hard for many people to save up, further contributing in limiting our chances of buying a house. In addition, other respondents also cited the housing shortage as a contributing factor in making the environment harsh for first home buyers.
Rick Otton, an expert in helping first time home buyers, explained that buyers should start looking for alternative solutions if the existing system isn’t giving them the right opportunities.
“When buying property, most people look towards home loans for financing. However, first home buyers are finding it more difficult to qualify for a home loan. The most common barrier for many of them is saving enough money for a deposit,” said Mr. Otton.
“So if taking out new loans is too difficult for people who are just starting out, why not use the financing that’s already in place?” Mr. Otton asked.
He went on to explain that assuming old mortgages allow buyers to get more flexibility in paying for houses for sale, because you won’t have to pay a large amount of deposit upfront and you may pay for the house in reasonable intervals – depending on the terms agreed upon with the seller.
For more info on alternative investing solutions, you may visit Rick Otton’s Community Meet Up page.