Millennials less focused on homeownership

Millennials less focused on homeownership

The financial priorities of younger generations are shifting away from owning a home as more rely on family to help cover their living costs, new research has suggested.

In its survey of more than 2,000 UK consumers money app Yolt found just two in five millennials considered owning a home as a long-term financial goal.

The fintech company's data revealed a shift away from the historical idea that homeownership was "one of the most important aspects of growing up in the UK".

It suggested one reason for the shift was that purchasing a property was no longer a "realistic goal" for many millennials.

This was despite the government's extension of its Help to Buy scheme in the Autumn Budget and a stamp duty break for first time buyers and shared ownership properties.

Defining the millennial generation as those aged between 18-35 years old, the survey found one in five received some sort of financial support from family or friends towards covering their cost of living. 

Despite this the research found 64 per cent of millennials were "optimistic" about achieving their future financial ambitions, with nearly half citing supporting their current or future family as their most important long-term financial goal.

But Ricky Chan, director at IFS Wealth & Pensions, said a shift away from property as a financial priority was not something he has experienced among his clients. 

He said: "Anecdotally, I still see plenty of younger clients aspiring to own their own homes, and even amongst my friends, getting onto the property ladder still remains an important priority for them. 

"Although many are probably forced to rent for longer due to high property prices, especially in London, I don’t think their financial goals or priorities would have changed."

Mr Chan added: "This has been ingrained into our culture and society, so I don’t see this shift anytime soon – particularly as financial knowledge of intangible investments and pensions are still pretty poor across the board, especially with 'millennials', whereas property is of course tangible and easily understood."

Yolt's research did find positive patterns of saving among younger generations, with the average respondent millennial putting away 25 per cent of their income each month - the highest proportion of any age range included in the research.

The fintech company partially attributed the higher rates of savings found amongst younger generations to an increased likelihood they were living at home with their parents until later in life.

The survey was carried out between September and October last year.