For the young people of this generation, or ‘millennials’ as the preferred term by the Media, the notion of investing in a mortgage and grab a rung on the property ladder doesn’t seem achievable. Housing price inflation is at a concerning point, and politically the world looks turbulent to say the least!
So what replaces that ‘right of passage’ for a millennial? According to some industry experts, it’s travelling. Not the worst alternative, but is it yet another indicator of the rapidly transitioning culture we have seen with the ‘generation of information’?
Comparing home-buying and travel
The world is smaller than it’s ever been. Travel is cheaper, information is more widely and quickly spread than ever before, but wouldn’t you like to establish a home for yourself to return to first? This is the decision faced by some.
To some, it’s a choice between saving for a car and travelling, for others it’s saving for a deposit. It’s fairly safe to guess which is the more achievable goal, in the UK at least. The market is thriving with cheaper ways to buy and insure a home, but for a significant portion of young people this still isn’t enough to be able to afford to get on the property ladder.
Difficulties for Millennial home-buyers
According to the Financial Conduct Authority (FCA), first-time buyers now are at risk of paying almost 50% more for a house than a decade ago, and this is down to the extended mortgage options available to buyers now. Interest mounts as home loans can now be spread to over 35 years.
So where does this land first-time buyers with owning their own home?
Well, according to the same study, 22% of buyers from 2016 will be near 70 before they’ve even finished paying their mortgage off! Even with great ways to save on home-buying and insurance online, perhaps the instant gratification of travelling isn’t the financially irresponsible choice it seems to be…
“The urgency has gone”
Managing director of U by Uniworld, Chris Townson, claims that, “Property ownership is out of reach for many young people at this stage in their lives, so we are seeing more investment in travel and life experiences as a definite trend … With home ownership out of reach for many young people, this money is being invested in taking more, and better quality travel experiences.“
Businesses have already been catching on to this trend, with numerous companies now catering accommodation and travel specifically for millennials, with the concept of maximising their experiences. Townson believes that millennials are ‘choosing to live in the moment, investing in experiences over bricks and mortar’, and it looks like he’s right. Until deposit prices become more reasonable, or mortgage payments have contracts that have an endpoint in sight, then it may look like travelling is the trend that young people will progress to and continue to make in the coming years.
If you are fortunate enough to be considering buying your own home (or selling one) then why not check out our conveyancing service which compares solicitors to keep costs down for you