Who will be the next generation of home owners in the UK?

Who will be the next generation of home owners, will prices come down?

UK millennials are behind the global trend when it comes to buying a home, and are less than half as likely as their counterparts in China to own their home. Meanwhile, in the UK, just 31% of young people surveyed by HSBC said they had bought a home. UK millennials have suffered from rapidly increasing house prices and stagnating wages. Britain had the second largest gap between house price growth and wage growth of the countries surveyed. House prices are growing at 7.5% while wages are increasing at a rate of just 1.8%. Around two-thirds of millennials surveyed who don’t own a home said they need a higher salary to be able to buy.

Will house prices start to slow down or drop?

House prices in the UK could fall by 10% over the next two years due to rising mortgage rates and the squeeze on household incomes, according to forecasts from the Office for Budget Responsibility. Although this does not appear to be the case in cities like London and the South East, as in March, the majority of London sellers have therefore been able to secure their asking price or even receive higher offers from buyers. Those renting a property hoping to see a house price drop will be disappointed with plans on hold to move from rented to buying their first home.

Market Trend

One trend is the increasing number of millennials who are reaching the age where they may consider buying a home. Millennials, who are born between 1981 and 1996, have faced many challenges when it comes to home ownership, including high student debt and a difficult job market. However, as they enter their thirties and forties, many may begin to see home ownership as a priority. Another trend is the increasing diversity of the UK population. As people come to settle in the UK, they may bring different attitudes and practices when it comes to home ownership. For example, some countries place a greater emphasis on owning a home as a symbol of success and stability, others are happy to rent.

Conclusion

Finally, it's worth noting that home ownership rates have been declining in the UK over the past few decades, due to a combination of factors such as rising house prices, stagnant wages, and stricter lending standards. It's possible that this trend may continue, with fewer people able to qualify for a mortgage.

There are possibilities of buying around the country and there are creative solutions to get on the property ladder, with the right advice from the right people.

Stuart Scotland
6/5/23