Research from Halifax has revealed a disjointed picture of home ownership among young people aged between 11 and 21 over the biggest financial commitment of a lifetime, and a wake-up call for future first-time buyers to get more clued up on ‘adulting.’
A third of kids aged 11 to 14 are banking on mum and dad to cough up the cash, meanwhilemore than one in five of their 18 to 21-year old counterparts (21%) are relying on the government to help them on to the property ladder. Future first-time buyers have high hopes for becoming homeowners and 59% of 18-21-year-olds feel it’s very important to own a home, but the report found a clear gap in house price outlook. One in five kids aged 11-21 in London think they can snap up a home from as little as £50k up to £200k – when the average first-time buyer house price in London is £422,580.
23% of 15 to 17 year-olds believe that only rich people own their own homes, which is not surprising if a quarter of youngsters that age expect to save for 20 years towards a deposit.
Young men were more optimistic, as 23% of those aged 18 to 21 reckon a deposit of between £5,000 and £10,000 is enough to buy a home, whereas only 5% of females thought that would be enough – a bit short of the actual UK first-time buyer deposit mark at £32,3211.
With an eye on the future, 20% of 18 to 21 year-olds are counting on inheritance to pay off their mortgage, with males being far more hopeful of a legacy clearing their mortgage than their female counterparts (31% vs 18%).
Russell Galley, managing director at Halifax, said: “Despite being one of the most important financial decisions we’re ever likely to make, becoming a homeowner feels like a mystery for Generation Z who will soon be thinking about flying the nest.
“Although our research found that the vast majority of 11 to 14 year-olds understand what a mortgage is, one in 10 aged 18 to 21 think Stamp Duty is money to pay for stamps – so there’s clearly a job for all of us to help kids get a better idea of what’s involved with taking the first step on to the property ladder.”
When it comes to buying a house, older teens and young adults (18 to 21 year-olds) are less realistic with 15% thinking it takes more than a year to complete a home purchase.
The research found that the internet leads the race as the go-to place to buy a property (36%) and rising to 44% for 18 to 21 year-olds. This is followed by a ‘house shop’ (33%) and the bank (27%).
The survey also found that today’s youngsters consider meeting their new neighbours a bigger priority than getting wifi – 32% vs 24%. This was most pronounced amongst the 18 to 21 year-olds (41% vs 24%). For this age group, buying a sofa was also more important than having a housewarming party (12% vs 5%).