Owning your own home - dream or reality?

Property continues to be a sought after asset for most people in the UK with nearly 64% of the population currently owning a property, however this is lower than the all-time high of nearly 71% in 2003. One of the main reasons for the reduction in home ownership is a severe housing affordability crisis in large parts of the UK since the early 2000s.

So despite rising real incomes, significant population growth and strong growth in nominal and real house prices, construction of new permanent dwellings has been decreasing dramatically since the last 1960s, leading to the current substantial housing shortfall.

Buying a home - not so straightforward

Whether buying a home through a mortgage or cash payment, for many people it is only possible later in life. According to the National Association of Realtors the median age for first-time homebuyers in 2017 was 32 years old.

Generally the higher the household income the greater percentage of property ownership with managerial, administrative and professional occupations ranking higher for property ownership at 81% ¹. Property ownership is also higher amongst older age groups where over 70% of over 65s own their own home as opposed to less than 50% of 25-34 year olds ².

This has also been further accentuated as a result of the recent pandemic: with low interest rates and rising demand for larges homes, the housing market has boomed throughout 2020-21 further pushing up house prices often out of reach for younger people.

So why buy a home?

Amongst the reasons that people give for deciding to buy a home are having a sense of security and using the property as a means of future wealth preservation ³. It is also often cheaper to buy than to rent – assuming the required deposit can be saved.

Generally, the best age to buy is when you can comfortably afford the mortgage and household payments, tackle any unexpected repairs, and live in the home long enough to recover the costs of buying and selling a home.

For many, owning their own home can feel like a dream – but with planning, it could become a reality. Please Contact us about the steps you could take to make owning your home a dream come true.

1. Source: https://www.ethnicity-facts-figures.service.gov.uk/housing/owning-and-renting/home-ownership/latest
2. https://www.statista.com/statistics/321065/uk-england-home-owners-age-groups/
3. https://www.statista.com/statistics/1033483/main-reasons-why-people-want-to-own-their-own-home-uk/

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.