When the elderly population were in their 20’s their priorities were to get a safe job, buy a house, and raise a family. In terms of priorities, not much has changed for today’s generation of young people. However, it is taking them longer to get onto the property ladder. Why the dramatic change? Why are young professionals taking longer to invest in UK property than a generation or two ago?
A Property Purchase is an Investment In Their Future
If you invest in UK property to live in or rent out, you invest in your future. For young professionals purchasing a home is one of their foremost goals. The first property purchase is potentially followed by a second and a third and potentially. All while advancing their careers. Once on the property ladder, life eases for struggling youth.
Price and Mortgage Deposit Rises a Hindrance to Property Investment
The requirement of a large mortgage deposit remains a key reason why youth are taking longer to invest in UK property. Property prices are over one hundred times higher as compared to the ’60s. Five decades ago property price increases didn’t really make a difference as mortgage deposits were lower. The dramatic increase in UK property prices has not corresponded with wages, which have gone up by approximately 33% on average.
Family Handouts And Loans Help Young People Invest in UK Property
Over the last few years, research shows the majority of younger first-time buyers afforded property buy because of loans and money granted by parents and grandparents. With such large mortgage deposits required, approximately one in every four sales of first homes are assisted financially by family members. In other words the bank of mum and dad.
In 2018 over £6bn was spent by parents, and assorted relatives across the country helping out with mortgage deposits. Obviously, not all young people have solvent family members. The rest are left with no choice but to keep saving.
Young Professionals Stay in Rental Apartments For Longer
For young professionals investing in UK property is becoming increasingly difficult. More often than not, they need to stay in a city-centre location for their employment commitments and to advance it. But, in doing so they are usually in a position where they need to rent. We have already seen a large rise in students remaining in the cities where they studied due to more promising career opportunities.
Oftentimes, their families live further afield. In order to stay in the city, they need to find a rental apartment. When they start paying rent and other bills they are unable to save as much money towards a mortgage deposit until they advance careers. Hence, many dedicate themselves to their jobs until they are in a position to cover overheads and save for a deposit.
From an Investor’s Perspective
It may be a tiresome process for the young professionals out there but for UK property investors, it serves as an opportunity. There is now very high demand for apartments in city centre locations or areas within close proximity to the city. A main selling point for rental apartments is easy public transport access.
Looking at the current Property Investment Tips, you may observe many developments being built to target young professionals. Although they are keen on keeping expenses lower, they maintain a set of standards for rental properties.
The location of a rental property remains one of the most important factors. It will determine the type of potential renters and could also be the reason for how long it stays vacant or occupied. It is very uncommon for young professionals to live in rural areas as most are seeking rental properties near to a city. Traditionally, London was the place for those seeking to make a name for themselves in their chosen career path but these days things are starting to change.
Continuous developments in the Uk’s northern region are having a knock-on effect for corporations and organizations looking to reduce expenditure. We are now seeing the country’s largest businesses relocate their headquarters up north. They realize their money goes a lot further than it does in the Capital. With companies relocating, workers and professionals moving too. They also realise that their money will go a lot further as well in their career.
Comfortable Living And Career Focused
On standards, youths who wish to pursue their career to the fullest while saving for a property will still require a comfortable place to live. Few are prepared to live in a cheap and drab apartment until they have secured the funds for a mortgage deposit. Instead, the majority seek a spacious but small apartment in a decent location with attractive communal spaces. Of course, the main feature will always be how easy it will be to commute to work.
In a comfortable apartment, young professionals may sideline the rush to save a mortgage deposit. If they were stuck in a bleak apartment while working their socks off it would fuel them more to get out of there. There is certainly a strong demand for sophisticated city-based apartments. For the country’s youth, saving enough money to purchase a property can feel insurmountable. As property prices rise, so do mortgage deposits.
Many people choose to live with their families until they have saved enough for a property. However, for young professionals, this isn’t always possible with the location of their work. UK property investors around the world are noticing the demand and are cashing in on the opportunity.