HOW MILLENNIALS ARE CHANGING THE HOUSING MARKET
House prices are constantly on the rise, with the average UK home now totalling £317,218.Property costs are even higher in London, at an average of £610,912.
Compare this to 1990, when the average house price was just £59,987. Sure, salaries were lower, but when you compare the average salary in 1990 (£13,760), with today’s (£27,700), you can see how much more difficult it is financially, to get your foot on the property ladder.
Whilst there are Help to Buy schemes set up for first time buyers in the UK, ultimately, the unrealistic prices are pushing millennials out of the housing market. Instead, they’re forced to be creative, and come up with alternative solutions. Times are changing, and in this article, Cleveland Containers looks at how millennials are looking to alternative solutions.
Living with Parents
In 2015, 3.3 million young adults (aged 20-34) lived with their parents: this reflected half of 20-24 year-olds, and a fifth of 25-29 year-olds.
Compare this to 1996, when there were 618,000 less young adults living at home, and you can clearly see the rise in popularity in this trend.
The reason why more millennials are choosing to live at home (although “choosing” may not be the right word, so much as “have no choice”) is simple: the deposit on a house is high.
The reality is, is that rental prices don’t help with this either. As these figures soar too, it’s become near-impossible for millennials to rent their own place whilst also saving for a deposit.
In the major cities, this is most apparent. Rent on a one bed property in London averages at £1,133, and the same property in Manchester will cost you £712 a month, excluding council tax and bills.
Millennials renting properties are paying half of their monthly wages in rent – and more in London – so it’s no wonder they can’t save for a deposit, when they need the rest of their wages to fund the costs of everyday living!
Now, the average age of a first-time buyer in the UK is 30, and 32 in London; as millennials struggle to save for a house deposit.
Buying with Friends
Whilst the rising cost of the housing market is drastically affecting millennials’ decisions when purchasing a house, there is another factor at play too.
38% of millennials have stated they would seriously consider buying a home with a friend. 52% said this was because they couldn’t afford a property by themselves, whereas 42% stated it was because they didn’t have a partner to buy with.
More millennials are staying single, and in their search to find “the one”, are waiting longer to get married. The average first-time bride now gets married at 30.8, and first-time groom at 32.7. Compare this to the average ages of brides and grooms in the 1970’s at 22.6 and 24.6 respectively, and you can see the dramatic change.
Perhaps then, it’s no wonder that many millennials are choosing to buy properties with friends: not only is the amount needed to save for a deposit halved; the mortgage, council tax and utility bills are slashed by 50% too.
Alternative Living Accommodation
The lack of affordable accommodation has forced millennials to get creative with their living space, which has resulted in plenty of alternative housing solutions.
Shipping containers are steadily growing in popularity as a substitute for bricks and mortar buildings. Their strength and durability is ideal for housing, as they won’t crumble over time. Windows can be fitted to let natural light in; and water and electricity can also be installed. Multiple containers can even be joined together to create a larger space, all for the fraction of the price of a house.
It’s not just shipping containers that are helping millennials to deal with the housing market. Currently, there are 15,000 inhabited houseboats across the country; and others are residing in converted vans, sheds… even tree houses.
The other alternative, which is extremely popular in London, is the micro-flat. Essentially a grown-up University dorm, residents have their own private bedrooms (and en-suites, in some cases), but share lounges, dining areas and laundry facilities with other residents. Rental costs are much lower than what they would be for a traditional flat, and enables residents to save money for deposits, whilst making friends.
It’s no secret that getting a foot on the property ladder is much harder than it’s been in the past, and it’s unlikely to change. However, rather than being deterred, millennials are actively finding ways to deal with this difficulty, and in turn, are helping to change the housing market.
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