A recent survey suggested that just one in 10 people in the UK believe that property is affordable with a third suggesting it is unaffordable for first-time buyers. While there is no doubt that the rising cost of property in the UK has impacted the aspirations of many potential first-time buyers, is home ownership compatible with the modern day lifestyle?
Saving for a deposit
In years gone by many people would take years to save for a deposit on a new property, scrimping and saving as much money as possible. While it would be wrong to suggest that all first-time buyers today want a quick route to ownership, it would appear that many people are prepared to go into debt to borrow money from friends and family for a deposit. While this is a very useful shortcut the fact remains that the deposit money will need to be paid back at some point.
The days when the bank of “mum and dad” was able to assist children looking to acquire their first home would appear to be fast coming to an end.
Again, while it would be wrong to suggest that all first-time buyers are looking to incorporate a luxury lifestyle with their own property purchase, is there potential for cost savings? For many people the choice is stark, give up your holidays and other “luxuries” in the short to medium term in order to fully fund your home purchase going forward. It is also worth noting that even those who do not pursue a luxury lifestyle have seen a massive increase in the cost of living which has left less free money for mortgage payments.
In simple terms, the cost of living in the UK has increased dramatically of late leaving behind the average increase in wages.
Taking a long-term view
The likelihood is that the acquisition of a home will be the largest investment in your lifetime and is something that you need to think very carefully about. If you believe you can fund the acquisition of a property, live an acceptable lifestyle and still have some money left over for a “rainy day” then there is no reason why you cannot pursue your dream. The fact that it won’t be easy, there will be challenging times and current low base rates will eventually move higher are hurdles, but not necessarily the end of the dream.
Much of the media attention on the UK property market tends to revolve around the likes of London and the more expensive regions of the country. Even though there has been increased interest in areas such as the North of England there would appear to be potential for good value acquisitions on a long-term basis. We all have different lifestyles, we all have different financial restrictions and there is no one size fits all answer with regards to home ownership.
In some ways the lifestyle which many enjoy today and acquiring their first property may not be compatible in the short to medium term. The stark decision to cut back on expenditure and save for your first home is something which many people have faced over recent years. In reality there is affordable housing in the UK, mortgage rates are currently attractive but it is perhaps the relatively slow increase in average wages which is a concern. If the cost of living continues to rise, and wages are unable to keep pace, this will leave less and less disposable income for the likes of mortgage payments. However, with a little inventiveness, and a determination to acquire that first property, anything is possible.