The current condition of the housing market in Britain has meant that many millennials (those aged 22 to 30) have been forced to wait longer before trying to buy their first home. The situation proves far from ideal for those who want to move into an owned home straightaway, as there is a lack of available houses to buy in Britain and, as a result, a higher price tag on these homes. Despite this, a survey carried out by NatWest found that millennials are optimistic about buying their first house, regardless of when that may be.
The results also revealed that there was a significant knowledge gap when it came to millennials understanding the housing market. Whether millennials are optimistic or not, the first-time buyers’ dilemma can be improved by bridging the knowledge gap with the appropriate information.
Why is there a knowledge gap?
To try and find out why millennials have a lack of understanding, we first need to consider the different areas of confusion. The survey highlighted that millennials didn’t have a clear idea about the overall process of buying a house and were concerned with its perceived difficulty.
An alarming 50% found the mortgage process difficult to understand, 35% of which were millennials actively looking to buy. Also, for those actively looking, 44% believe it would take them 16-30 years to pay off their mortgage compared to those not currently looking (39%), who figured it would take them over 30 years to pay off their mortgage. The figures also showed that, remarkably, a massive 41% of millennials didn’t know how much deposit was needed to secure a property.
Where to find help
Some millennials may have displayed a gap in their knowledge but they can certainly prepare themselves in advance by getting to grips with how the house buying system works. Even with the lack of available houses (due to skills shortages and planning delays), millennials who are still living at home or renting can look into Government schemes such as the ‘Help to Buy’ scheme. Schemes like ‘Help to Buy’ give the buyer the opportunity to secure a property with a deposit of as low as 5%. This eases the process as the size of deposit on many properties levels out usually at around 20%.
As well as Government schemes, millennials can seek help from family members or friends who have previously taken out a mortgage. Financial advice can be acquired from banks or by researching online.
Taking all this information on board, when the opportunity to buy a house does arise, those millennials actively looking to buy can advance with the process with the knowledge to support their confidence.
Richard joined Eddisons in 2003 and has been the Managing Partner since 2012, a role that sees him lead the strategic direction and development of the business under the ownership of Begbies Traynor Group plc. Richard has been instrumental in the growth of the business which has seen turnover more than double since 2008.
In addition to his role as Managing Partner, Richard continues to play a vital role with key clients, particularly in the banking sector, where he is a trusted adviser to major high street clearing banks. Over the last eight years, Richard has been appointed LPA Receiver on many high profile properties and assists in the recovery of distressed loan portfolios.
Prior to joining Eddisons, Richard worked in the real estate division of a 'Big Four' firm where his notable assignments included the privatisation of Saudi Telecom for flotation on the New York Stock Exchange.