Younger people are struggling to get on the property ladder according to a recent report by the NAEA (National Association of Estate Agents). It says in June 2014 just 3% of home buyers were aged 18-30.
Affordability and struggling to get on the property ladder
Why are younger people struggling to get on the property ladder? The problem is that younger people need bigger deposits now to buy their first home. There has been a tightening up of the mortgage lending criteria which now includes a series lifestyle questions. Mortgage lenders are more aware than ever of the need to ensure you can pay what is due to them monthly. There are also stress tests, including your ability to cope should the interest rates rise to 3% and in some cases above.
There was a bit of welcome news earlier in the week that house price growth may be weakening. If you do not have affordable homes to buy there will be a stagnant housing market. How else are those wanting to move up to the next rung going to manage this? Some, by default, have had to become private landlords enabling them to get a new home. This leads to another problem in that those wanting to buy can’t, so will spend a lot longer renting.
Have a plan in place to get on to the housing ladder
Stop struggling to get on the property ladder. Get a plan in place that will enable you to save enough for a housing deposit. To do this may mean staying at home longer. Alternatively you could look for affordable homes to rent. Try to find properties to where there is no deposit or bond required. Look out for landlords offering more affordable rents and other tenant incentives. If you are employed remember that you can rent from private landlords, housing associations and letting agents. In some cases you may find that housing associations in some areas offer properties for rent below the market rate. It is worthwhile doing your research.
Sacrifices may have to be made to save up for your deposit
You may have to make sacrifices though if you are struggling to get on the property ladder. So you may need find a cheaper area to rent in or compromising on space. This may mean staying in at home longer or renting a smaller property that will cost you less.