Getting on the property ladder has never been harder for young, first time homeowners. Extremely high property rates, slow housing turnover, and less buying power are causing millennials to postpone house hunting. The average age of the first-time homeowner is now 33, climbing from 25 over the past decade.
Becoming a homeowner in a time of high property prices, digital revolution, and environmental crises have given young house hunters unique preferences. Below, we’ll unpack these sensibilities.
Tougher to get on the Ladder
The UK’s housing crisis has been widely documented, but the dream of home ownership is still alive and well in the UK, with nearly all young Brits still wanting to own a home. And as unforgiving as the market can be, trends are finally showing some signs of change, driven by help-to-buy schemes. Some 41 percent of 25 to 34 year olds live in a home they own, with the other half on private renting. And of those non-owners, 74 percent aim to buy in the next five years.
And those who can move, do, seemingly unfazed by the political uncertainty in Westminster. “People will continue to move out of rented accommodation or mum and dad’s house,” says Chartered Surveyor David Hammond”.
Small, not Less
Young adults and early family starters are living in more economically challenging times. Shrinking pay is significantly impacting the British millennial’s ability to get on the property ladder. Individuals born in the 1980’s are earning 13 percent less than their counterparts born in the 70s during the same period of their lives.
Millennials are adjusting by developing a preference for much smaller houses compared to their older counterparts, in occasionally unorthodox ways. A growing cohort of 20 and 30 somethings across the nation are embracing “tiny homes”, cleverly designed newbuild homes less than the size of a Baby Boomer’s living room, but with all the amenities of a full-sized house. And while the majority of British millennials may not be ready to sign the lease on the tiny house movement, small yet functional are still on top of their house-hunting checklist.
They’re in it for the Long Haul
Millennials see homeownership as a rite of passage. A mark of independence. But when it comes to homes, they’re buying for more than themselves. More prospective homeowners saving for houses that can accommodate their future family, with flats falling out of favour.
In fact, nearly half of first-time homeowners already move into their homes with families, according to research by banking firm Santander. Millennials are leapfrogging bachelor pads for three-bedroom houses.
These are individuals looking to lay down roots, despite being called a restless generation. “People are looking to buy their homes to live in for eight to 10 years, whereas 20 years ago people thought they were buying for just three or four years,” says Zoopla Insight Director Richard Donnell in an interview with The Telegraph.
A Willingness to Splurge on Smart
Millennial homeowners grew up amidst fast Internet connections, on-demand services, and data-driven personalisation. They’re expecting their homes to be as intuitive to their needs, complete with Internet-enabled appliances: 40 percent want smart devices in their kitchen, while half look for smart TVs in the living room. Recognising the demand, some real estate companies even use free smart technology to sweeten the deal for homeowners.
For these individuals, technology is not a luxury, but a necessity to have at home. And they’re willing to pay the price. Price-sensitive as they are, many are willing to shell out an additional £1,000 for smart features and integrated systems.
Going Green for Lower Bills
Young house hunters today are more discerning when it comes to the carbon footprint of their homes. Having witnessed first-hand the effects of climate change and environmental destruction, these people are keen on limiting their own impact on the planet. They’re much more eco-conscious than Boomers or their Gen X parents, and are actively interested in sustainable homes built with natural materials like reclaimed wood.
Yet millennials aren’t going green purely for the interest of Planet Earth. As clean energy proves to be more energy efficient, homeowners are looking to modern homes that can cut their expenses. In fact, millennials will consider paying more for a property that can guarantee lower utility bills.
However their preferences have been changed by challenging conditions, homeownership still remains a top aspiration for young Brits. The next few years will show how the government and private sector introduces much needed policies and schemes that make the property ladder easier to enter for a demographic that’s hungry for a place of their own.