With 65% of millennials renting outside of their family home, getting on the property ladder is an expensive dream a third (31%) aren't even saving towards
Over half claim they can barely cover their day to day living costs so saving just isn't an option. A further 40% feel they just can't afford it on their own so they need financial help from somewhere
Fear of mortgage application rejection is a key barrier for over one in eight millennials. A further 12% cite missed credit card payments and 7% unauthorised overdrafts on their credit record as a problem
Over a third (37%) are struggling to pay off existing debts before they start saving to buy their first property, one in five want to have fun (22%) and 19% want to find love before they buy
One in six (16%) are waiting for the death of a loved one before they take their first step onto the property ladder. Almost half are looking to grandparents and 41% to the bank of mum and dad
When it comes to considering options outside of inheritance; just a third (34%) will look at the help to buy mortgage scheme, 9% will consider shared ownership and 6% guarantor mortgages
New research from independent comparison website money.co.uk amongst 1,000 millennial 'wannabe homeowners' reveals that one in six (16%) are waiting for the death of a loved one before they take their first step onto the property ladder.
Almost half of those waiting for inheritance are looking towards grandparents for this windfall and a further 41% are banking on the death of mum and dad. When it comes to the timing of the inheritance, one in ten anticipate they will get it in the next ten years, a further 10% concede they might have to wait between ten and twenty years.
However, this isn't as mercenary as it sounds. Many millennials feel their financial options are limited with more than half claiming they can barely cover their day to day living costs so saving simply isn't an option. A further 40% say they just can't afford to do it on their own so need to get financial help from somewhere.
What's stopping millennials that want to buy?
53% can't afford to save
32% can't afford the area they want to live in
19% are scared of such a big financial decision
12% are worried about being rejected by the mortgage provider
12% worry about the impact of missed credit card payments on their credit records
12% don't know what to do first
9% do not have the discipline to save
7% have un-authorised overdraft blemishes on their credit records
4% have county court judgments
So why can't millennials afford to save their own money to get on the property ladder?
Over a third (38%) are waiting to pay off existing debts first. Over a fifth of the 'romantics' are waiting until they find love to split the financial burden. For 22%, living for the moment is a priority above and beyond saving to buy a home.
Do millennials know what the options are?
Shared ownership. Despite the fact this has been around since the early 80s, one in four (24%) haven't heard of it and just 9% are going to use it.
Help to buy mortgage scheme: Over eight out of ten (84%) millennials are aware of this scheme but just one in three (34%) are planning to use it.
Gifting from parents: Almost two out of three (65%) have heard of this but again, just 11% are planning to use it as a way of funding their first home.
Guarantor mortgages: 57% of millennials are aware that their parents can 'guarantee' their mortgage payments for them but just 6% will use this.
Help to buy ISA:One in four wannabe buyers haven't heard of these - just 38% will use one.
Getting on the property ladder may not be the impossible dream many people think it is. There are a surprising number of schemes that can help those who can't afford to get a big deposit together, many of which they probably don't even know about.
If parents can afford it, 'gifting' money to children or grandchildren can often be a good way to give kids a tax free early inheritance to help with the deposit. Alternatively, parents that are confident in their kids' financial capability can be a 'guarantor' for their mortgage - this might help get them get the deal they need.
The most important thing to do is to work out how much you can scrape together and be prepared to compromise, you might not be able to afford your dream home when you first buy. You don't need to be super rich, have wealthy parents or an inheritance before you can buy a house. Just be realistic about what you can afford and do your homework.Source: Hannah Maundrell, Editor in Chief, money.co.uk“
See our guide for more top tips on how to get your first steps on the housing ladder.
1. Research carried out on behalf of money.co.uk with OnePoll amongst 1,000 employed 18-34 year olds who want to buy their first property between 30th September 2016 and 10th October 2016.