It may be difficult for first-time buyers to take that first step on the ladder, but that doesn't mean they're giving up hope – indeed, their homeownership ambitions remain heightened, with research from HSBC hinting that today's Generation Rent could be tomorrow's Generation Buy.
The research looked at the homeownership aspirations of millennials across the globe, and found that the ambitions of those in the UK remain very much alive and well, despite the challenges of saving for a deposit, with 74% expecting to be property owners in the next five years.
However, while that initially sounds promising, we're well below most other countries surveyed – the average figure came out at 83%, with only France below the UK in terms of aspirations, as 69% of French millennials expect to buy in the next five years.
Slow salary growth and rapid house price inflation are thought to be providing additional challenges in terms of housing affordability for the UK's millennials, with the report noting that the average UK property price rose by 7.5% in 2016, while wages grew by just 1.9% over the same period.
Nonetheless, "this study challenges the myth that the homeownership dream is dead for millennials in the UK," said Tracie Pearce of HSBC. "With three in 10 already owning their own home, the dream of home ownership for millennials is definitely alive and kicking; they face a two-pronged problem of rising house prices and slow salary growth which means the dream of home ownership is a challenge, but not unachievable."
There may be issues with affordability to contend with, but millennials are rising to the challenge. Many are willing to make sacrifices to buy their own home, with 47% of those intending to buy saying they'd consider spending less on leisure and going out, while 33% would be prepared to buy a smaller home than their dream. Many are turning to the Bank of Mum & Dad to make the dream a reality, too, with 27% saying their parents are a source of funding.
However, despite the best intentions, the report also highlighted the fact that many need to do more if they're to succeed, particularly when it comes to sorting out their finances. Indeed, of those planning to buy in the next two years, 40% have no overall budget in mind, and 48% have only set an approximate budget, which could make it a whole lot harder to get to the point of being ready to buy.
Indeed, 57% of those who have bought a home in the last two years admitted they overspent on their budget, so forward planning is key.
So just what can you do to make your homeownership dream a reality? We've got a few ideas:
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