More than four in ten (42%) British adults under the age of 40 who do not currently own a home are now ‘Guppies’ – young people, many of whom have professional careers and big salaries, who have ‘Given Up on Property’.
The Guppies of today are in stark contrast to the ‘Yuppies’ of the Eighties and Nineties – young urban professionals with a good salary and no issues buying a home.
The new figures - from Zoopla - show that even amongst those earning over £60,000 per year, 38% have given up on affording a home in the next decade. Overall, just one in five (21%) say that they will ‘definitely’ be able to afford a home in the next decade, while 14% are currently planning to buy one, or in the process of doing so.
The vast majority of Brits under the age of 40 in the UK do not already own a home – just 22.5% of those aged 25-34 and 1.4% of those aged 24 or under do*, as non-home-owning under 40s in the UK are now more likely to be living with their parents, than planning to, or in the process of, buying a home (14.4% vs 14.1%).
Amongst those who have given up on a home in the next decade, the cost of living crisis (64%) is the main barrier to home ownership, whilst increasing house prices are highlighted by 51% and nearly half (49%) point to higher mortgage rates.
Of those who are planning, or in the process of buying their first home, 85% say they have made financial sacrifices to do so. Over a third 34% have given up holidays, and 30% have had to give up socialising. A quarter (25%) have stopped saving for their future and one in ten (10%) have even given up dating or being in a relationship in order to afford a home.
Younger people can get on the housing ladder but many need to make compromises in order to do so. Amongst those under 40 who are currently planning, or in the process of, buying their first home, seven in ten (69%) say they made compromises on the property. Most common were ‘not being able to buy in the area they’d ideally like to (31%), not being able to buy a home in as good condition as I’d like (18%) and being unable to afford any spare rooms’ (17%).
Many also look to alternative locations. Just 33% of all under 40s who don’t currently own a home say they’d be able to afford to buy a property where they currently live - but 23% say they might if they were to move further away.
Location is the key Amongst those who say they might be able to afford a home if they moved to a different location, they’d on average have to move around 37 miles. As such, investigating new areas may be the key to homeownership for many.
In adulthood, many move away from where they grew up. But for some, moving back could help. Overall, 37% say that they’d be able to afford to buy a home in the place where they grew up. However, this rises to nearly half (49%) in Scotland and 45% in Yorkshire and the Humber. Those in the South of England are less likely to be able to. Just 27% in the South West and 33% in the South East say they could afford a home where they grew up.
Many young adults today are open to less conventional ways of getting on the ladder. Nearly a third of under 40s who don’t currently own a home (31%) would be open to a part ownership or help to buy type scheme, and 18% would be open to buying with a friend, colleague or sibling.
Many are also up for getting their hands dirty - a fifth (20%) would be open to buying a near-derelict home and doing it up whilst 19% would even consider building a home themselves. Seventeen percent say they would be open to moving to a cheaper area and working remotely.
Daniel Copley, consumer expert at Zoopla shares his tips for getting on the property ladder:
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Find out what you can afford: Use a mortgage calculator such as the one on Zoopla to find out what you could afford based on your income to get a starting point for your search.
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Be area-agnostic: Most people in the survey say they can’t afford to buy a home where they live or where they grew up, so the reality for many is that they’ll need to look at alternative locations. Zoopla’s area guides can help you find out where might be right for you.
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Look at the help available: There are many schemes out there designed to help people get on the ladder. Shared ownership schemes (where you own part of the home and pay rent on the rest) can be a great way to get a foot on the ladder. Meanwhile 95%, mortgages, can help make saving the deposit less of a barrier.
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Don’t go it alone: Buying with a friend or a partner is one way to slash costs significantly and pool your salaries together. It may feel risky, but it’s actually very straightforward to get a legal document drawn up to enshrine what your share of the property is.
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Get the right mortgage: Many people will have seen worrying news reports about huge increases in monthly mortgage costs - in fact 18% in the study said they’d be too worried to take out a mortgage. However, there’s a number of options so it’s vital to choose what’s right for you. For example, a fixed mortgage reassures you of what your monthly mortgage payments will be for a set period. Free online mortgage brokers such as Mojo can help here, by looking for the best options for you.
Daniel adds: “There is little doubt that younger people today face far more barriers to getting on the housing ladder than previous generations, However, with the right knowledge and understanding of what your options could be, owning a home may be more in reach than some realise.”