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The big property generation gap

At the age of 30 millennials spend an average of 23% of their annual income on property, compared to those born between 1926 and 1945 who, aged 30, spent just 7%, according to research by the Resolution Foundation.

Young people are spending three times more on housing than their grandparents did.

In this area the percentage of income spent on property is likely to be much higher than the UK’s average of 23%. In London, huge house price inflation has led to people spending a higher proportion of their disposable income on housing. This has been driven partly by a sustained period of low interest rates and partly by demand outstripping supply.

Attitudes to lending have changed too since our grandparents were young. Banks are willing to lend more to individuals as a proportion of their salary than they used to. Back then far fewer women were working whereas today, with more couples working, the banks take both people’s salaries into account.

When our grandparents were in their 30s there was much more movement in the property market than there is now – people would typically buy a smaller home outside their target area and upscale gradually as finances allowed.

Baby boomers (those born between 1946 and 1965 spent, on average, 17% of their income on property, while those born between 1966 and 1980 spent an average of 22%.

The report revealed that while post-war baby boomers now benefit from record levels of outright ownership, 36% of young families (aged 25-34) live in private rented accommodation.

But things are looking up. The number of mortgage loans issued to first-time buyers in the past year is at its highest level since before the financial crisis.

    Posted 3rd October 2017

    ABOUT THE AUTHOR

    Vicky BibirisManaging Director

    Vicky started with Location Location as a junior negotiator in 2006 and within a short period of time became the top performing sales consultant in the company taking on the role of Branch Manager in 2009. Vicky's exceptional ability is backed up by her infectious enthusiasm for people and property, this led to her becoming Sales Director and equity partner in 2012. Vicky has been an integral part in establishing Location Location's reputation as one of North London's leading estate agents.