The housing aspirations of the next generation of homebuyers and the crucial need for greater education on housing options for young people have been revealed in a new report on the state of condominiums in England.
Affordable housing provider SO Resi, part of Metropolitan Thames Valley Housing, surveyed 2,000 18-30 year olds across the UK and found that 70% of respondents said they would rather own their own home. Yet despite significant interest, two-thirds said they knew nothing about the buying process.
Moreover, less than a fifth of young people today are even aware of affordable housing options such as condominiums. Once explained, the interest in using such programs jumped up to 50%. Of those surveyed, one in two said they relied on their parents’ advice to move up the housing ladder.
Kush Rawal, Director of Residential Investment at SO Resi, comments: “What this research has revealed is that young people rely heavily on their parents or grandparents for information about home ownership. For an older generation, buying a house meant paying a down payment and securing a mortgage. The problem with this is that it does not give confidence to young people who cannot afford a mortgage in the traditional sense. They are unaware of plans such as condominiums that have been designed for a new generation of overpriced buyers. The housing market has changed beyond recognition over the past 40 years and young people need to be able to access reliable information on all avenues of home ownership.
The in-depth research is designed to uncover attitudes towards home ownership each year and understand young people’s housing ambitions. Important details about housing attitudes and aspirations of young people were revealed, including:
More than half of the respondents lived in rented accommodation, with only 16% currently owning their home.
Renting was seen as a necessity, with 60% saying it was all they could afford, while 47% of 25-30 year olds felt they had no choice but to rent because they couldn’t get a mortgage because they weren’t earning anything. sufficient or having an insufficient credit rating.
70% of respondents said they would rather own their own home. Yet despite strong interest, two-thirds said they knew nothing about the home buying process.
Affordability is considered the biggest barrier to homeownership and was cited by 61% of 18-24 year olds and 53% of 25-30 year olds as the main reason not to buy.
Home ownership was the second highest priority for young people after getting a good job.
Although considered a necessity by the majority, research has revealed that there are several frustrations associated with renting. The most common was the perception that renting is “dead money” followed by the frustration of not being able to personalize the accommodation by decorating it for example. There was further dissatisfaction with how quickly landlords deal with repairs and concerns among the older cohort about the security of tenancy if a landlord changes their mind. Renting was generally seen as a temporary situation, with owning a home seen as the ultimate goal.
Respondents were asked specifically about their attitudes towards co-ownership, a form of tenure that helps overcome the affordability barrier to homeownership by allowing the purchase of a leasehold property for a lower deposit with rent paid on remainder. While seniority helps tackle the affordability issue head-on, there was a worrying lack of awareness of the product, with only 18% of 18-24 year olds and 32% of 25-30 year olds aware of it. shared ownership option – and just 19% are considering it. However, once the mandate was explained, the interest rose to 47% for the youngest and 42% for the oldest, the possibility of paying a lower deposit making this form of purchase more attractive.
This report is not alone in warning of concerns about a lack of education in the housing industry and follows a series of surveys looking more broadly at money management. The Center for Social Justice’s recent article, “On the Money – A Roadmap for Lifelong Financial Learning,” found that 14 million adults with financial challenges attribute it to poor money management skills, with only one in three children currently receiving some form of financial education in elementary school.
Dr. Samuel Bruce, Housing and Communities Manager at the Center for Social Justice, comments: “We found in our research that two-thirds of 18-34 year olds think their personal situation would improve with better financial education. High prices relative to incomes mean far fewer young people are homeowners than a generation ago. SO Resi’s welcome research addresses both of these questions. It shows that developing affordable housing options is only part of the solution; we also need to create awareness and understanding of the different pathways to home ownership that are available in today’s market.
Kush concludes: “Our research shows a serious lack of education about housing options for young people, and as an industry we need to act now to ensure we take a proactive approach to providing education on the subject of accession. property, regardless of their future tenure.. If we don’t do this, a whole generation risks missing out.