Millennials, aged 18-34, are having to make sacrifices unheard of in previous generations to get onto the property ladder, according to a new study by online mortgage broker Trussle.
When asked about the compromises made to buy their first home, one in five (16%) millennials had to move back in with their parents, compared to just 5% of Generation X (age 35-54), while a further one in five (17%) had to take a second job.
Millennials are more than twice as likely to put off getting into a romantic relationship, twice as likely to delay having children, and 3.5 times as likely to sell their car, compared to the generation before them.
The findings demonstrate the impact of soaring house prices and slow wage growth on first time buyers. Analysis by Trussle revealed that house prices are almost 15 times more expensive than they were 40 years ago, rising almost twice as fast as wages. Since 1978, the average UK house price has risen from £14,236 to £211,000 soaring 1,382%. In comparison, the average annual UK salary has risen from £3,269 to just £26,500.
For a lot of young people, the dream of home ownership is so unachievable that it’s no longer a top life goal. In fact, when asked about their top three life goals, millennials are focused on travelling the world (27%), having children (24%), and finding the perfect job (24%), while buying a home only ranked fifth (21%). In comparison, buying a first home was the biggest life goal for both Generation X (36%) and Baby Boomers (42%).
The study of over 2,000 mortgage borrowers also showed that younger people are almost six times as likely to buy with a friend, and three times as likely to buy with a sibling compared to Generation X, potentially leading to complications further down the line.
Ishaan Malhi, CEO and founder of Trussle, commented:
“The housing landscape has changed drastically since Generation X were buying their first homes. House prices have risen almost twice as fast as wages over the past forty years and young people are being forced to put their lives on hold in a bid to join the property ladder.
"It shows just how unaffordable it currently is for first-time buyers and there needs to be serious commitment to innovation to make home ownership more affordable and accessible to young people once again.
"Building new homes is not enough. We have seen new moves from the Government to enable renters to build credit, which is a step in the right direction to help young people. However, the major sticking point is that mortgage products are outdated. To fit the current landscape, lenders need to take a long term view on an individual, taking into account earning trajectory to assess affordability, and creating individual mortgage products based on personal circumstances.”