New survey conducted by Tiles Direct reveals the greatest barriers preventing young Brits from saving for a deposit and getting themselves onto that all-important property ladder and buying their first home.
Constantly rising property and rent prices have proved the ultimate obstacle for Generation Y, followed by the ever-increasing cost of living. They have come under fire for their lack of saving and irresponsible spending, but is this a fair reflection?
The study conducted by Tiles Direct has revealed that 38% of young Brits – and over half of 25-34 year-olds – believe rent is too high to save for a deposit on a house. It is said that in high rent regions such as parts of London, renters are paying up to half their monthly salary on rent.
In the study, 10,000 people in the UK were asked what they believe is the single greatest barrier to first-time buyers saving for a deposit on their house. What came out were rent prices, the cost of living and a lack of well-paid employment opportunities as the top three reasons.
A big second was the high cost of living, with 21% of respondents declaring this the biggest barrier for first-time buyers, as they said their salaries had become more and more thinly stretched.
18% thought the lack of well-paid job prospects was to blame. Over a fifth (20%) of women responders considered this their greatest hurdle on the path to homeownership.
Across the board, inflated rent prices were held most responsible for the first time buyer’s struggle to save for a deposit – the average cost of renting in London has reached almost £1500, according to recent data from HomeLet.
However, despite the capital’s spiralling rent prices, just 31% of Londoners considered this the greatest block to buying a house – versus a huge 59% of people living in the North East.
As UK house prices continue to outstrip average salaries, the Chief Executive of housing and homelessness charity Shelter, Campbell Robb, predicts: “Generation Rent will be forced to resign themselves to a life in expensive, unstable private renting”.
The Y factor
While these important factors took the lion’s share of the vote, some respondents felt that “Generation Y” were to some extent the architects of their own demise, with 6% blaming the irresponsible spending habits of first-time buyers.
9% of the vote noted a lack of motivation to save money as a serious barrier to buying a home, and 18% of 55-64 year-olds consider this the root cause.
Surprisingly, 17% of 18-24 year-olds agreed: citing an inability to save (10%) and reckless spending (7%) as two of the primary roadblocks.
15% of over-65s blamed poor interest rates offered by banks for their inability to scrape together a deposit, as the financial incentive to keep money in the bank hits rock bottom.
Other responses blamed Britain’s acute housing shortage, escalating house prices and a domination of the UK property market by rental accommodation – highlighting the perfect storm of socioeconomic factors affecting first-time buyers nationwide.
Topline results of the Tiles Direct Survey:
In your opinion, what is the single biggest barrier blocking first-time buyers from saving for a deposit on a house?
- Rent is too high to save for a deposit: 38.0%
- Higher cost of living: 21.0%
- Lack of well-paid employment opportunities: 18.2%
- Lack of motivation to save money: 8.8%
- Irresponsible spending amongst Generation Y: 6.4%
- Poor interest rates on savings accounts: 6.0%
- Other: 1.6%
Tiles Direct is an independent tile distributor and retailer based in Leeds, Yorkshire, and has created a strong reputation for providing fantastic customer service combined with the best quality products at the lowest possible prices.
This data for their survey was gathered in April 2016 and includes responses from 10,000 people in the UK.
What keeps first-time buyers off the property ladder? https://t.co/nlzT7YkRPh
— LandlordZONE (@LandlordZONE) May 4, 2016