Press comment: Broken housing market
causing delay to life milestones
18 February 2019
If you’re covering today’s figures from the Office for National Statistics on milestones to adulthood please see the following comment from Gemma Harle managing director of Intrinsic’s mortgage network, part of Quilter:
“The societal impact of high housing prices and people’s inability to get on the housing ladder are revealed in the ONS’ latest figures on life milestones. Over half of 25 to 34 year olds are renting compared to 35% in 1998. This is in part because average house prices for first time buyers are 8.2 times people’s salary, almost double the level they were at in 1993. In 1997 the most common living situation for young adults was as a couple with one or more children and by 2017 that has shifted to more young adults living with their parents.
“The average age of a first time buyer is now 34 years old and with 30 year old mortgages becoming common that means they won’t be paying off their mortgage till they are in their mid-60s. As a result everything in life is being pushed down the road. That makes it even more important to think about speaking to a mortgage adviser when thinking about taking out your first home loan. Among other things, they will be able to advise you on the lender’s approach to early repayment, for example, which might allow you to cut the borrowing term in the future.
“Shifts in lifestyle patterns is no bad thing in of itself, but when it’s a result of a broken housing market that’s a sign of concern and something that government should be taking seriously. There is a severe lack of supply in the housing market, particularly for first-time buyers. And while banks and lenders are attempting to come up with solutions such as intergenerational mortgages and 100% mortgages they only help a small percentage of the population, namely those who have parents or grandparents that can support them. And anyone considering these products should seek financial advice so they are aware of the risks associated.”