Posts with tag: getting on the property ladder

A Fifth of Adults Live with Their Parents Until They’re 26

Published On: November 1, 2015 at 11:56 am


Categories: Finance News

Tags: ,,

Those already on the property ladder may not know how hard the housing crisis is hitting, but many are finding out, as their adult children move back into the family home.

New research reveals that a fifth of young adults are living in their parent’s home until they are at least 26-years-old. The same proportion do not pay their parents anything for living at home.

A study by Nationwide found that the percentage of young adults living at home varies across the country, from under 9% in the East Midlands to more than double that in London, where house prices and rents are the most expensive. While most pay their parents something, 20% pay nothing at all.

Young adults are suffering from low wages and record high rents, while those hoping to buy a home of their own are finding that the monthly cost of renting is preventing them from saving.

Housing charity Shelter reveals that half of private tenants cannot save anything towards a deposit, while a quarter can only put £100 or less aside each month.

Although mortgages are cheaper than ever, due to record low interest rates, the best deals are for those with large deposits.

Percentage of over-18s living with their parents

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As such, young adults are increasingly moving back in with their parents in order to save money. Nationwide discovered that 28% of adults are living at home because they are trying to save a deposit. However, the building society also found that 30% are not saving any money.

A spokesperson for Nationwide says: “The hotel of mum and dad is often staying open for longer than many anticipated, our latest research shows. Rental costs and deposits or the need to save for a mortgage deposit mean that some children understandably have to wait before flying the nest. And, for some, moving out may never be an option.”1 

Michael Day is 30-years-old and lives with his parents and older brother in Bristol. Renting a one-bedroom flat in the city costs between £500-£800 per month, while buying a similar home would cost around £130,000.

He comments: “I don’t really want to move out to rent as it’s more than a mortgage, but you need such a big deposit to get a mortgage so it’s been a bit of a vicious circle.”1

Additionally, Michael does not want to share with strangers. At home, he pays minimal rent to cover bills and keeps the rest of his earnings for himself. However, he admits that he spends spare cash on holidays and golf, as he plays at county level.

Sue Green, from Saga, which sells insurance and products to the over-50s, says the majority of parents may not have planned to have their children living with them into adulthood.

She explains: “Most will be more than happy to house them in the family home rent-free because it might help their kids get on the property ladder sooner. Children who don’t pay rent may contribute in other ways like buying groceries, family takeaways or doing odd jobs around the home.”1

Young adults contributing at home

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Co-founder of think-tank the Intergenerational Foundation, Angus Hanton, says older generations are “the architects of the housing crisis” and young adults should not be blamed for staying at home.

He reports: “The under-30s have suffered a fall in average incomes of about 20% since the 2008 downturn. Rents and car insurance have never been so high, and mortgage lending rules have been tightened for the young but not for older buy-to-let investors, who squeeze out the young.

“Student-free debt is rising rapidly, yet many jobs on offer – zero-hours and short-term contracts – are turning younger workers into second-class citizens. Rather than blaming the young, we should be standing up for their interests so they can afford to build lives of their own.”1

Percentage of adults living at home saving for a property

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Jenna Gavin, 29, lives in the home she grew up in in Southport, Merseyside. She moved out for a year to go to university, but has been living with her parents since. She now works as a medical receptionist nearby, but renting in the area would cost over £420 a month before bills, which would take up a lot of her income.

She states: “I don’t want to rent; I don’t want to spend all that money and have nothing at the end. I’ve looked at buying and seen mortgage advisers, but I just can’t borrow enough to get on the property ladder.”

Jenna is trying to save, but it’s a struggle: “You don’t really see it building up as much as you need – even a 5% deposit is such a lot of money and I would like to put down more.”

But her parents are happy not to charge her rent: “They want me to try to save up and I contribute in other ways – I bring food in and I do things around the house.”

Jenna has her own space, but this is the bedroom she moved into when she was 14; she always imagined having her own house by the time she was 30: “I don’t see that happening, as it’s next year, so hopefully in a couple of years I’ll have moved out.”1

Are your children still living at home? Or are you struggling to get on the property ladder? 




David Cameron’s Starter Homes Only Affordable to Those Earning Over £50,000

David Cameron’s 200,000 new starter homes will only be affordable to those earning over £50,000 a year and more than £77,000 in London, according to housing charity Shelter.

Shelter calculates that the new scheme to fuel low-cost homeownership will be unaffordable for average income households in six out of ten English council areas. The policy was the focus of the Prime Minister’s first Conservative Party conference speech today.

David Cameron's Starter Homes Only Affordable to Those Earning Over £50,000

David Cameron’s Starter Homes Only Affordable to Those Earning Over £50,000

For those on the new living wage of £9 per hour in 2020, the homes will only be affordable in 2% of councils.

These figures weaken Mr. Cameron’s vow to help young people get onto the property ladder.

Last year, Mr. Cameron promised to build 100,000 new homes a year, but doubled it to 200,000 per year by 2020 in the Conservative general election manifesto.

Today, he explained in more detail how the Government will engage in a “national crusade to get homes built” and turn “generation rent to generation buy”1 by introducing incentives for developers to build more affordable homes, by relaxing planning regulations.

However, Chief Executive of Shelter, Campbell Robb, insists the new scheme will only benefit those already able to buy a home.

He explains: “You don’t solve an affordability crisis by getting rid of the few affordable homes we’re building, yet that’s exactly what this policy will do.

“Today’s announcement confirms our fears that starter homes costing up to £450,000 will be built at the expense of the genuinely affordable homes this country desperately needs.

“Our research has shown that these starter homes will too often only be affordable for higher earners, not the millions of people working hard for an average wage, who will be left stuck in expensive private renting.”

He concludes: “There’s nothing wrong with helping people onto the property ladder, but the Government has to invest in genuinely affordable homes to buy and rent for all of those on ordinary incomes who are bearing the brunt of this crisis.”1

Last year, 141,000 homes were built in the UK – just over half of the amount needed to prevent house prices continuing to soar.

In his speech, Mr. Cameron revealed the first steps towards increasing housing supply, by permitting developers to build affordable homes to sell, and rent, under their planning obligations.

At present, developers must set aside a certain proportion of their site to be used for affordable renting.

In the future, they will be able to sell these homes at a 20% discount on the price of other properties on the site. The Government will impose a cap on the amount that developers can charge for these homes – £250,000 outside of London and £450,000 in the capital.






Prime Minister to Promise 200,000 Starter Homes

Published On: October 7, 2015 at 11:30 am


Categories: Landlord News

Tags: ,,,

The Prime Minister is set to announce plans for 200,000 new affordable homes to buy in his speech at the Conservative conference today.

House builders in England will no longer be forced to provide low-cost rental homes in new developments. Instead, they will be able to offer starter homes for first time buyers aged under 40 at discounted prices as well.

David Cameron will tell Tory members that he hopes to transform generation rent into generation buy.

Prime Minister to Promise 200,000 Starter Homes

Prime Minister to Promise 200,000 Starter Homes

Those that buy these new starter homes will be unable to sell them for a quick profit under the new policy, which aides insist will provide 200,000 new homes by 2020.

Mr. Cameron’s speech began at 11:30.

The PM is already facing opposition to his Right to Buy plans, which will see housing association tenants given the option of buying their homes.

However, Mr. Cameron has focused on homeownership in his campaign, as levels have decreased significantly in recent years due to spiralling house prices and high deposit requirements. He will state that more needs to be done to make housing affordable for young people.

He will tell Tory members in Manchester: “When a generation of hard-working men and women in their 20s and 30s are waking up each morning in their childhood bedrooms, that should be a wake-up call for us.

“For years, politicians have talked about building affordable homes, but the phrase was deceptive. It basically means homes that were only available to rent. What people want are homes that they can actually own.”1 

He will claim that local authority planning rules demanding certain types of affordable housing prevent house building and he will vow to introduce more flexibility into the system.

Policy Manager at lobby group Generation Rent, Dan Wilson Craw, insists that starter homes will not help tenants that are “really struggling” and urges Mr. Cameron to prioritise social house building instead.

He adds: “Under the Prime Minister’s plans, only 200,000 relatively well-off households will get to buy a home. But there are five million households who will remain stuck in private rented housing, paying out half of their income to their landlord.”1

The starter homes scheme was first revealed in the general election campaign and will offer discounts on homes worth up to £250,000 outside of London and £450,000 in the capital.

Buyers will be unable to sell these homes for up to five years.



Young Adult Living With Parents Feel They Don’t Have Independence

Young Adult Living With Parents Feel They Don't Have Independence

Young Adult Living With Parents Feel They Don’t Have Independence

One fifth of working 20-34-year-olds have moved back in with their parents in the last 12 months, reveals recent research by Shelter.

The housing charity’s study also found that 15% have never even moved out of their family home.

YouGov commissioned the survey, which shows that 56% of young adults living with their parents said the reason they were living there is because of the high cost of housing.

Over one third said they were trying to cut down on costs in order to save up for a deposit for their own home and over a fifth (21%) stated that renting is too expensive.

However, living in the family home is also having an emotional impact on young adults. Despite feeling lucky to have the option of living with their parents, 62% said they fear this prevents them from having independence.

Shelter warns that current Government schemes, such as Help to Buy, do not help those on ordinary incomes. It notes that young people are left with just two choices – costly and unstable private renting or living with their parents.

The survey of 4,069 adults was conducted between 21st-23rd September.

















The Buy-to-Let Sector in Numbers

The Buy-to-Let Sector in Numbers

The Buy-to-Let Sector in Numbers

The Bank of England (BoE) has warned that the buy-to-let sector could have a detrimental effect on the country’s financial stability.

Rising property prices, which are making it difficult for many to get onto the ladder, could eventually lead to a housing market crash.

Former business minister Sir Vince Cable has also voiced his concerns. Read more: /ex-minister-warns-of-another-housing-market-crash/

So how big a problem is buy-to-let in Britain?

Private landlords now own one in five homes and half of the five million new properties built between 1986-2012 are under their ownership.

Of all landlords, 10% get half or more of their total income from their property investments.

The estimated value of buy-to-let properties in the UK is a huge £1 trillion.
























Shortage of Affordable Homes Causes 50% Fall in Young Homeowners

The amount of homeowners in England and Wales has fallen by almost 250,000 over the last five years, according to recent Government figures.

Since 2010, the level of homeownership has dropped from 67.4% of all households to 63.3%. At the same time, the number of families living in the private rental sector has risen by 2.5m.

The decrease in homeownership arrives despite several Government schemes aimed at helping young people get onto the property ladder. Through the latest initiative, under-35s can buy a new home with a 5% deposit.

However, research compiled by the Labour Party, before its annual conference in Brighton, indicates that under the coalition government, there was a 50% decline in the amount of young people owning a

Shortage of Affordable Homes Causes 50% Fall in Young Homeowners

Shortage of Affordable Homes Causes 50% Fall in Young Homeowners


The study, using official Government data, found that just 800,000 people under the age of 34 now own a house, half of those that had their own home in 2010. The average deposit needed to buy a property is now £57,000, up from £43,000 five years ago.

Meanwhile, private sector rents have hit a record high. The average rental property now costs £803 per month, a 20% rise on 2010. Annually, rents cost £1,636 more a year than in 2010.

Labour will focus on housing in its first conference since the general election.

The party’s new leader, Jeremy Corbyn, has called for rent controls to be introduced, and the issue could be put to vote after an emergency motion was selected for debate.

In an interview ahead of the conference, Corbyn stated: “My view is the Government should introduce rent regulation.”

He added that until this happens, the benefit cap should not be cut: “The amount of money saved in the overall budget from the household benefit cap is actually quite small.”1

Corbyn has given the role of shadow housing minister to John Healey, who will take a full seat in the shadow cabinet.

Healey claims that for the past five years, the Conservatives have blamed Labour for the shortage of housing, but this will “no longer wash”.

He reports that the Government have built too few affordable homes, while also failing in their pledge to deliver one-for-one replacements for properties sold through the Right to Buy scheme.

He continues: “There’s so much more ministers could be doing to ensure more people are decently housed and to help the next generation get on.

“Millions of people are now struggling with the cost of the housing crisis – higher rents, more homelessness, the lowest rate of homeownership in a generation, and fewer homes built than at any time since the 1920s. Their inaction is indefensible. There can, and must, be change.”1

A Department for Communities and Local Government spokesperson responds: “The 2008 economic crash devastated the house building industry, leading to the lowest levels of starts for any peacetime year since the 1920s.

“We have got Britain building again, with housing completions at their highest annual level, and nearly 800,000 homes built, since 2009.

“We are also planning to build 200,000 starter homes across the country, which will enable young first time buyers to buy a home at a 20% discount.”1