In recent years, research has highlighted the many challenges that young adults in the UK face in trying to access home ownership. The plight of potential ‘first-time buyers’ has now become an emotive national issue, with particular attention being paid to the youngest adults in our society, who are expected to be entering adulthood with particularly low prospects of home ownership.
Housing market not deterring young
Given the seriousness of these barriers to ownership, and the pervasiveness of news coverage of the issue, we might expect younger adults to be particularly pessimistic about their likelihood of becoming home owners in the future. However, research recently conducted by NatCen for Yorkshire Building Society indicates that in fact younger adults are more positive about their prospects of home ownership than adults in their later twenties and thirties. Four in five (81%) potential first-time buyers (defined as people who have never owned a home but would like to in the future) aged 18 to 24 felt that it was ‘likely’ or ‘very likely’ that they would be able to own a home in the future, compared to just over half of 25 to 40-year-olds. One in five potential first-time buyers aged 25 to 34 and almost one in three of those aged 35 to 40 didn’t think they would ever be able to afford a home, unless house prices were to crash dramatically.
Perceived likelihood of owning a home
Base: Potential first-time buyers
Life gets in the way
The findings from our research suggest that pessimism among older first-time buyers might in part result from other things ‘getting in the way’ of people’s plans to buy their first home. Around a third of potential first-time buyers aged 25 to 40 who were not currently saving for a home said that this was because their bills or debts were too high, compared to only 15 per cent of 18 to 24 year olds.
Younger adults might be in a better position to be able to save for their first home, for instance having less existing debt, and being more likely to be able to adopt strategies for saving such as moving back in with parents or living in shared accommodation with friends – options that are often less feasible for older savers, and particularly those with children of their own.
The findings from this research challenge the idea that young adults in their early twenties are disillusioned or detached from the idea of home ownership. More than four in ten potential first-time buyers aged 18 to 24 were actively trying to save for their first home, even though for many of them this was a long-away event that they did not expect to happen any time soon. This suggests that this age group are a prime target for the government who are seeking to encourage first-time buyers to get saving and to plan for home ownership.
It remains to be seen whether the high levels of optimism and motivation to save among this group will persist, or whether life will once again get in the way.