The pressure of buying a home is more prevalent to millennials than ever before. Between the pandemic, oncoming recession, low wage growth and countless more economic factors, young people are falling short of access to the housing market. And can you blame them?
Countless sources claim that it is frivolous spending on coffees and takeaways, but to what extent are we supposed to save to offset the housing shortage and mismanagement of the economy?
Entering the rising cost of living crisis, battling high energy rates and inflation at 10%, it is erroneous to say that young people are spending too much on coffee when in reality, they are not. Currently, most are spending on groceries and keeping the lights on. The argument for young people to stop ‘wasting money’ is pointless. According to PricedOutUK statistics, to afford the £74,000 average house deposit, renters would need to give up 561 years of Netflix, 25,965 oat milk lattes and 86,047 avocados. Saving is without a doubt a crucial part of buying a house; no one expects to afford an investment like this easily but saying that the problem is mainly due to reckless spending is ridiculous. We must acknowledge the other factors stopping young people from climbing the property ladder.
Young buyers are led to believe that buying a house is an impossible feat. Cries of there being a housing shortage, ludicrous prices and no jobs after university displace any hope they may have of getting started. Because of this scaremongering and over-exaggeration, young people feel dissuaded from educating themselves on how to start. A lack of financial knowledge regarding mortgages and interest rates is arguably the most significant barrier for young buyers, perpetuating the habit of renting and struggling to buy in the future when they have more commitments. This sees that most buyers can only enjoy the satisfaction of owning a home in their old age and potentially paying mortgages at later stages in life alongside other financial burdens that come with family.
In addition to this, it is not surprising to hear that wages haven’t correlated with the rise in house prices. The ONS published that house prices have risen by about 20 per cent since the pandemic alone, while average wages have grown by about 10 per cent in that time. However, wages are only a problem if young people can find a job after university, leading smoothly onto the fact that many are crippled with masses of student debt. COVID has been difficult for everyone, but the general public has failed to acknowledge that young people whose education suffered, money was wasted on courses that were held online and facilities that were unable to be used are still bearing the brunt of those consequences. To no fault of their own, we are facing a generation that has missed out on crucial stages of their lives, leaving them ill-equipped to move further at a ‘normal’ pace.
Is there hope for the future? Ultimately there is a lack of supply, lack of money, lack of knowledge and lack of affordable houses. Solutions thus far sustain that young people pull themselves up and start making tough decisions. This is unfair; 50 years ago, I can assure you that buyers did not have to make the same sacrifice required today. ONS data purport that whilst housing prices have raised 68% over the past ten years, wages have risen by a mere 31%. It is not the sole responsibility of young people to battle the economic disadvantages before them; they must be taken off the back burner of society and made a priority to end perpetual renting if we want to increase home ownership in this demographic.