First home? No sweat, say millennials
Apparently, a lot of young people are brimming with confidence about climbing on the property ladder. Really? A recent survey suggests they may not be ready for the harsh reality.
Are you an optimistic millennial? Or are you just in denial? (If you don’t know what a millennial is, then they might be your kids – usually it’s anyone born from the late 1980s onwards).
Well, we certainly seem to have some hardy millennials among us. A survey from NatWest recently discovered that the younger generation is surprisingly upbeat about the chances of buying a first property. Flying in the face of most reports about first-time buyers, less than half of those surveyed believe that the UK is experiencing ‘Generation Rent’ (a whole age group who can’t afford to get onto the property ladder). Meanwhile an amazing 69 per cent believe they will have saved enough for a deposit within five years. So everything’s fine, yeah?
Maybe not quite. The respondents also said (a bit contradictorily) that current economic conditions had negatively affected their chances of buying a property, particularly in the West Midlands (83%) and the North East (78%). They also stated that their biggest concern was rising property prices, and that these were a key reason why they were still renting.
So with all these concerns, why are millennials still so optimistic? One possible answer is that not all young buyers fully understand the realities of the home buying process.
In particular, there appear to be fundamental gaps in knowledge relating to the various stages of buying a property. For example, when asked to estimate how much deposit they would need for their first home, a sizeable 41 per cent simply admitted they didn’t know. Of those who did know, 35 per cent guessed it was between 6 and 10 per cent. For the record, the current average deposit is around 30%. Furthermore, 50 per cent of those surveyed said they found the mortgage process difficult to understand.
It seems the confidence of millennials is in inverse proportion to how much they know about home buying. In other words, they’re not worried because they don’t yet see how difficult it could be.
Facing the facts
If you’re looking for your first home, your priority should be to get a good grasp of what’s involved. Don’t hide from anything that seems tricky to understand, and don’t assume you’ll cross that bridge when you come to it. Be absolutely clear about what will be required of you, and what preparations are needed before you make your bid to join the property ladder.
But where do you start? The simplest way is by talking to a financial adviser. You can book a free consultation with a mortgage specialist to discuss your needs, and our mortgage survival kit is also a great way to prepare.
Being optimistic is a good thing – you need to believe you can succeed. But temper than optimism with a hefty dose of realism, and there’s no better place to get that than from a professional adviser. Being ready for all eventualities can protect you from knockbacks and delays, and may well be make-or-break when it comes to getting the home you want. Above all, be smart. Being undaunted is one thing, but you certainly don’t want to be unaware.
To read more about NatWest’s millennials home buying survey, go here.
If you’re trying to get a good mortgage deal, a lot depends on your credit score. You can check your score, see how it might affect your prospects and even find out how to improve it at Experian CreditExpert.