Homeownership for millennials has not looked good in recent years, but this appears to be changing. Government statistics show that the number of 25 to 34-year-olds who own property has risen for the first time in over a decade. Financial support like the Help to Buy scheme has played a vital role in helping young people get on the property ladder. In this article, we will discuss the future of homeownership for young people in the UK and the key things to consider when buying or renting property.
Are young people in the UK renting or buying?
The English Housing Survey revealed that 41 per cent of people in the 25-34 age bracket live in a property they own, with the same percentage living in private rental properties. This is the first time in more than ten years that homeownership rates in millennials have increased. At the end of 2004, the percentage of people in this age bracket who owned a property fell to 36%. In recent years, the UK Government has introduced several schemes to provide first-time buyers with financial support. Here are some of the most popular first-time buyer schemes in the UK:
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Help to Buy
With Help to Buy, first-time buyers only need a 5 per cent deposit and can borrow up to 20 per cent of the purchase price (or 40 per cent in London) from the government to help them afford a newly-built home. Check out this article by moneyadviceservice.co.uk for more information on how the Help to Buy scheme works.
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Stamp duty relief
First-time buyers in England do not have to pay stamp duty land tax (SDLT) if their home is valued at £300,000 or less. If the property value is between £300,000 and £500,000, then first-time buyers pay a reduced SDLT of 5 per cent.
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The cost of renting vs. buying
Young people should weigh up the cost of renting vs. buying and choose the right housing option for them based on factors such as salary and lifestyle. Buying a property has higher upfront costs as you will need to put down a deposit to get a mortgage. You will also be responsible for the upkeep and maintenance of the property. Renting is often cheaper short-term, but you will have no equity in the property. You may also have additional costs to consider, such as general cleaning and paying for professional cleaning services at the end of your tenancy. According to Cleaner Cleaner, carpet cleaning Paddington experts: ‘manufacturers recommend vacuuming carpets once a week, and a professional steam cleaning annually’. You must follow this advice to keep your carpets in good condition and avoid unnecessary wear or damage.
Conclusion
The number of millennials who own property has increased for the first time in more than ten years. Government schemes such as Help to Buy and SDLT relief have made housing more affordable and helped first-time buyers get on the property ladder. Young people should weigh up the pros and cons of buying a house carefully when deciding whether to buy to rent.
