Inheritance Imperative to a third of first-time buyers
A recent report, by law firm Collyer and Bristow, looking into home ownership attitudes and aspirations, has found that 32% of potential buyers believe that the only realistic way they can envisage finding the necessary money for a deposit is through money from a relative or through being left money following a death in the family.
Claims that wages are not rising in line with inflation whilst house prices continue to soar have been blamed for these bleak statistics.
The report highlights the optimistic vision of 20-24-year-olds as 100% of respondents hope to buy a home in their future. However, the harsh market conditions drive all elation away with age as only 59% of those aged 25-34 can see themselves as homeowners.
Overall, males were more hopeful of purchasing property with 73% certain that they will own property within 5 years. Female respondents were more cautious with a mere 57% confident of securing a property in this time.
Massively, 29% viewed a 5-year timeframe as unrealistic which links us back to a third of respondents certain that they would require familial support to secure the purchase of a property.
Alex O’Connor, a partner at Collyer Bristow, said: “We have seen developers bring forward new tenures, such as dedicated Build To Rent schemes, but home ownership remains the ultimate goal”
“Given that for many home buyers personal savings play a big role, it is perhaps not surprising that price (77 per cent) trumps location (61 per cent) when buying. One statistic that did surprise us was the high number of purchases reliant on inheritance: 31 per cent of homeowners had inherited property or cash and a further 21 per cent expect to inherit property or cash to fund a property purchase”
Whilst the majority of hopeful young people strive and save to achieve a life-goal of home ownership, more difficult market conditions are creating a pessimistic view that home-ownership may be an unachievable ambition that will always remain out of reach.
Jonathan Cribb, Senior Research Economist at the Institute for Fiscal Studies, has commented: “Accounting for inflation, house prices have risen by almost 160% since the mid-1990s while young people’s incomes have grown by only 23%. This means that fewer and fewer can afford to get on the housing ladder.
“This gulf can essentially explain all of the fall in the home ownership rate over the past 20 years, analysis by the Institute for Fiscal Studies suggests.”
It is time that the sector recognises the severe difficulties that young people, who are at the start of their earning careers, have when trying to purchase property. According to the report, more needs to be done to help shift attitudes so correlations between young people looking for houses and Grandmas’s declining health do not become a housing sector norm.
With stamp duty cuts for first-time buyers and help to buy schemes, is enough already being done to help this section of the market? Have conveyancers noticed a first-time buyer becoming more reliant on family help to buy a property?