In generations gone by, a home would often be purchased shortly after a couple got married, a little home to raise a family. Working diligently for 25 years to pay off the mortgage would result in total property ownership and peace of mind that we're set for life with a solid roof over our heads. 

But as years have passed, this ideal path to property ownership eludes many of us. Dubbed 'Generation Rent', the average age of a first-time buyer in the UK is now around 33. Resigned to living in a rented property for the long term, many younger people feel that the dream of owning their own home may never be possible for them. 

Historically, a purchase of a first home used mortgage funds, possibly without any deposit needed. This mortgage would be three times the household income, which, although much lower than today, would be sufficient to buy a nice little starter home for you and your family. 

It's a very different picture for first-time buyers today. In almost all cases, a deposit is required of at least 5% of the purchase price of a property. And whilst mortgage lenders would like to keep the multiples at less than five times the annual household income, this still falls well short of the average house purchase price in the UK, which is currently reported as £285,000 (as of March 2023). 

A 5% deposit of this price is £14,250, meaning the remainder would need to be a mortgage, meaning that the required household income to purchase a property would need to be a whopping £90,250! 

With a current minimum wage of £10.42 per hour in this country and an average salary of £21,673, it is clear that owning your own home could be nothing more than a pipe dream for most young adults in the UK. 

Sadly, house prices continue to rise year on year, and salaries are not following suit. With an increased cost of living and rising property rental costs, saving up the deposit funds required to buy a home could be virtually impossible, even if you had a salary high enough to support the mortgage, no matter how frugal your lifestyle.

Does it seem that the current and emerging generations of young adults in the UK, the Millenials and the GenZ's, are destined to live in rented property forever? 

In most of mainland Europe, property ownership is not so coveted, and a far higher percentage of people of all ages choose to live in rented properties. In Sweden, there are ultra-long-term mortgages of up to 105 years, so the mortgage passes to the family. This keeps the monthly premiums very low and makes property ownership much more affordable. 

But this has not been adopted in the UK, despite Downing Street looking into offering 50-year mortgage terms last summer. So what can first-time buyers do to get that highly coveted first foot on the property ladder?

1. The side hustle - Many people are looking to take on extra jobs, in addition to their 9-5, to make a little extra cash in the hope of saving enough to make up a deposit. This could be an online venture or selling artisan products they make on platforms like Etsy.

2. Living rent-free - If you are expected to pay for rent and household bills, which usually make up most of your monthly spending, saving a substantial amount towards the illusive deposit can be almost impossible. This can mean that young adults continue to live with family for a monthly contribution to allow more saving potential. 

3. Bank of Mum & Dad - Perhaps the most widely reported option is for the parents to gift the deposit funds to their children to enable a property purchase. It is the fastest way to get on the ladder, but not everyone has savings to gift to their offspring. 

So, it could be the case that a large proportion of Millennials and GenZ population in the UK may be unable to buy a home of their own. But, if you are a parent, you could be expected to make a withdrawal from your life savings to help your children. 

If you have children considering buying their first property, contact our team of property experts to ensure they are registered for suitable properties so they don't miss out. Our Heads Up alerts system means they will be the first to hear about new instructions, so they won't miss out on the perfect property.