Millennials doubtful of EVER fulfilling homeownership dreams

• Over half (54%) of 21-35 year olds that don’t currently own a home doubt they ever will • 26% of millennials (3.3million* in UK) still live with their parents • Experian launches a tool to help younger people get to grips with moving out

London, 14th December 2017: New research from global information services company Experian reveals that 54% of British people aged 21 to 35 that don’t currently own a home are not confident they will ever be able to afford one.  Over a quarter (26%) of these millennials don’t think they will ever be in a financial position to get onto the property ladder and 28% are unsure.

Fears of being unable to afford a property get stronger as millennials get older. Of those aged 21 to 25 years old that still live at home, 18% do not think they will ever be able to own their own place compared to 25% of those aged 26-30. This increases significantly to over a third (35%) of 31 to 35 year olds.

For many millennials, living alongside mum and dad is not a choice. The survey revealed 1.4 million* British millennials (41%) currently live at home because they can’t afford not to. Almost a third (31%) said salary has the biggest part to play, 6% cited pre-existing debt and 4% put it down to general unaffordability after they had tried to live independently. Just over 1 in 5 (22%) choose to live at home to save for a deposit.

A sizeable 18% of millennials think that their usual personal monthly outgoings are typically more than their average personal monthly income. On average, millennials only manage to save £198 a month – totalling £2,376 per annum – which will not quickly build a deposit.

To support young people, Experian has launched a moving-out cost calculator, which estimates the average monthly rent and mortgage payments for an area, and gives an indication of living expenses like utility bills and council tax. The tool seeks to help them get a firm grip on the realities of renting and buying in their local area compared to the other parts of the UK and helps to ensure they are well equipped to get on the property ladder: http://www.experian.co.uk/consumer/generation-rent/#calculate-the-cost

James Jones, Head of Consumer Affairs at Experian comments: “Millennial attitudes towards home ownership are indicative of a demographic that is struggling to break even on monthly basis.

“However, it's encouraging to hear that this section of society will be a focus over the next few years, with £44bn being pledged to housing as announced last week in the Autumn Budget, as well as stamp duty cuts for first-time buyers.

“We really want to help millennials realise their dream of owning a home, which is why we’ve launched a tool to help them understand the areas that are more affordable for them. Taking the time to thoroughly explore the options for renting or buying as early as possible, understanding what is affordable and reviewing your finances are the first steps to homeownership independence. It is also a good idea to check your credit score to see how lenders may view you and see whether you might be able to improve your score to help you qualify for the top mortgage deals.”

Home truths

The survey found a quarter (3.3 million) of 21 to 35 year olds are still living at their family home. 16% of them have never left the nest and 1 in 10 have moved out temporarily, only to move back again. 74% of millennials have moved out of their parents’ property yet only half of this group (37%) own their house and the other half (37%) make up ‘Generation Rent’, currently renting the property they live in. For many, even renting their own place is not in sight, with those living at home predicting that on average it will take 2 years 8 months to be in a position to move out.

Experian’s moving-out cost calculator allows people to measure whether home ownership or renting would be a more viable option for them.

The tables below show the top five areas in the UK with the cheapest rent and mortgage payments. The figures are based on a 10% deposit for mortgage payments and exclude any set-up fees:

 

Ranking

UK Town or District

Median Monthly Rent payments

1

Burnley

£399

2

Hull

£425

2

Carlisle

£425

3

County Durham

£429

4

Middlesbrough

£431

5

Allerdale

£438

 

Ranking

UK Town or District

Median Monthly Mortgage repayments

1

Dundee

£349

2

North Lanarkshire

£355

2

Middlesbrough

£355

3

Hyndburn

£385

4

Hartlepool

£395

4

Durham

£395

4

Burnley

£395

5

Renfrewshire

£411


ENDS

Methodology:
This data is based on a 2,000 respondent OnePoll survey of 21-35 year olds based throughout the UK, conducted in August 2017. Quantifications of percentages such as *1.4 million living at home because they can’t afford not to* are based on ONS figures for the current count of UK 21 to 35 year olds at 12,820,748.

Rent and mortgage disparity figures are based on Experian’s first-time buyer data. Mortgage payment figures are representative on the house price and a 10% deposit alongside the most common mortgage product, a two-year fixed rate mortgage, and applied across 25 years. Experian uses the average two-year fix rate on the market for the last month of that quarter, which is listed on the Bank of England’s website. 

Media Contact:
Priya Sahib, PR Manager, UK&I Experian
Mobile: +44 (0)7816 491152 | Email: priya.sahib@experian.com

Charlotte Sexton, Marlin PR
Mobile: +44 (0) 7507 929174 Email: charlotte.sexton@marlinpr.com

About Experian: Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime. 

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