The latest rental price data from ONS has shown that the property dream continues to be a nightmare for today’s millennials.
For the year to July, rental prices across the country were up by 2.4%.
In London, the average increase was 3%.
Earlier this month, it was reported that property prices across the UK rose by an average 8.7% over the year to June, with prices in London up by 12.6%.
These price rises come at the same time that average wages have risen by just 2.2%.
Some new research from Aviva has found that the dream of owning a property remains the number one financial priority for millennials.
This is followed by the long-term goal of needing to save for an income in retirement.
However, for many millennials the ambition to own a home is an increasingly distant dream.
One in three fear they have been priced out of the property market for good.
When Aviva asked parents, 43% believed their children or grandchildren would never be able to afford to buy a property without help from their family.
Their research found that millennials have a typical disposable income of just £156 per month, and are more than £6,000 in debt.
The typical student expects to take 11 years to pay off their student debt.
With the deposit on a first time property estimated to average approximately £20,000, the challenge facing the younger generation is clear and dreams of property ownership can easily turn into nightmares.
Commenting on the latest data, Alistair McQueen, Savings & Retirement Manager at Aviva, said:
“An Englishman (or woman’s) home is their castle, but the dream of owning this castle continues to be a nightmare for today’s younger generation. The gap between wages and property prices continues to widen.
“Faced with these property pressures, it is understandable that the need to save for retirement can feel like a luxury few can afford.
“It is to the millennials’ credit that more than half (57%) see saving for their retirement as a financial priority. It is also to their credit that more prioritise long-term saving (49%) than short-term spending (33%).”
Something we are often asked to factor into Financial Plans for our clients is the impact of offering financial support to adult children to buy a first property.
We can model the long-term financial impact of this within the lifetime cash flow forecasts we create for our clients, giving them the peace of mind that they will not run out of money during their lifetime as a result of making the gift.
If helping children or grandchildren onto the increasingly difficult property ladder is something weighing on your mind, please do give me a call on 01483 274566 or email shelley@icfp.co.uk to discuss how we can help.
www.aviva.co.uk/home/home-advice/first-home/
