Young people now half as likely to own a home as they were in 1991
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Home ownership among young people in the UK has halved since 1991, new research has revealed.
The study by MoneySuperMarket found that 51 per cent of 16-34-year-olds were homeowners back in 1991, but by 2016 that figure had fallen to just 24 per cent.
Not surprisingly, the number of 16-34 year olds living in rental accommodation has also increased, from 56 per cent in 1996 to 73 per cent in 2016.
A combination of rapidly increasing house prices and a much slower increase in salaries is blamed.
The study also showed that buyers are becoming reliant on joint ownership to afford a home - individual ownership has dropped 20 per cent in just 20 years, while joint ownership has increased from 64 per cent to 77 per cent in this time.
With home ownership becoming less feasible, Brits are opting to spend their money on other things rather than saving for something they may never be able to afford, with 43 per cent preferring to save for a holiday over a home.
Research by the Resolution Foundation earliler this year found that up to one in three Millennials may never own their own home, and TotallyMoney’s Generational Spending study showed a similarly bleak outlook.
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According to TotallyMoney’s research, the average Millennial - which it defines as anyone born between 1977 and 1995 - only saves £176 per month.
This means it would take around 10 years to save just 10 per cent for a deposit on the average UK semi-detached home, which costs £225,674.
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In London, it’s an even bleaker picture. The average semi in the capital costs £580,930, meaning it would take a Millennial 27 years to raise a 10 per cent deposit.
Henry Keegan from TotallyMoney said: “Property is certainly more expensive than ever, and interest rates are notably low at the moment – both of which make it hard for younger people to be as well off as their parents or grandparents.
“But there is a noticeable trend that younger people might not be acting with a clear view towards saving for the future. Whether it’s higher spending on unnecessary purchases or an approach to spending which means that they run out of money when they need it, their spending habits may not always be in their best interests.
“We encourage everyone to do research, keep a budget, and use helpful tools to ensure they’re making smart financial decisions.”