Homeownership among the young drops to 27%

Homeownership among the young drops to 27%

Young people are moving further away from financial stability, with fewer now likely to own their own home or have enough savings, according to the Office for National Statistics.

In data released yesterday (4 October), the ONS found the proportion of homeowners in their twenties had fallen from 37 per cent to 27 per cent between 2008 and 2017.

The ONS found those aged 22 to 29 now also had less money set aside, with 53 per cent having no money saved in 2014 to 2016 compared with 41 per cent six years earlier.

But young people were less likely to be in debt, with the figure dropping from 49 per cent in 2008 to 37 per cent today, though this did not include student loans.

Ross Boyd, founder of mortgage platform Dashly, said house prices in many areas of the country were out of reach, meaning the transition from generation own to generation rent was accelerating by the day.

He said: "To rub salt in the wound of many young people today, monthly rental payments are often considerably more expensive than the equivalent mortgage payments would be.

"This partly explains the increase in the number of people with nothing in a savings account. With inflation above target for so long, and rents so high, many young people have nothing left to put aside."

Mr Boyd said finding a deposit to buy a new home could be an insurmountable challenge, especially so if savers were paying off debt from university.

He added: "In just a decade, the dynamic of home ownership in the UK has changed irreversibly. If this is to end then something fundamental has to change, and mortgage lending itself has to evolve."

Rachael Griffin, tax and financial planning expert at Quilter, said the fact homeownership among this generation had dropped by 10 per cent since 2008 was not a surprise.

She said: "If savings have also dwindled people simply do not have enough money for a deposit.

"Add this to a long period of steadily increasing house prices and you can see how difficult it is for young people to get a foot on the housing ladder, even if they are eating avocado on toast for breakfast."

Ms Griffin said there could be some positivity on the horizon, as the latest ONS data came from the immediate aftermath of the financial crash, when borrowers found it much harder to get deals without a decent sized deposit.

She said: "This situation is slowly starting to change and lenders are being more generous. However, house prices still remain high so unless there is significant drop in the property market we are unlikely to see a big boost in homeownership among the younger generations."