Like many of you, I tuned in to the radio on my way to work after a long and beautiful Bank Holiday weekend, to hear another top news story on how Britain’s younger generation is being let down by the government when it comes to getting onto the property ladder.
For those of you who missed it, a report produced by the Resolution Foundation suggested that the gap between the oldest and youngest generation is creating economic unfairness and, alongside increasing taxes to older people in order to fund healthcare, says that the government should give £10,000 to young adults when they turn 25 (to get onto the housing ladder, amongst other things).
Now, I don’t want to debate whether the report’s suggestions are right or wrong, but rather explore the bigger problem that it does highlight – affordability.
For aspiring first-time buyers, getting on to the property ladder is becoming increasingly difficult, and I don’t think many people in our industry would disagree with that. One of the biggest hindrances is saving enough money for a deposit – hence the Resolution Foundation’s solution.
However, are we missing a trick on this?
While there are many current government schemes aimed at helping first-time buyers with the cost (Help-to-Buy, Shared Ownership, Stamp Duty), it’s also widely known that the ‘Bank of Mum and Dad’ is often called upon to help fund the initial deposit, particularly for young buyers in London.
With 63% of first-time buyers currently renting privately*, my suggestion is – why not use the ‘reverse Bank of Mum and Dad’?
And by that I mean, live with parents until you can save up enough money to buy your own home.
Living with parents seems to be a problem for many aspiring homeowners, particularly as only 10% are still doing so*, but why, oh why, would you not take advantage of this if you can? There are many reasons that living with parents could benefit aspiring first-time buyers, particularly when the alternative involves spending anything from £500-£1000 to live under a stranger’s roof.
Yes, there is a degree of giving up a little bit of independence and the inevitable struggle of making your mark as an adult in what is possibly your childhood home, but living with parents can actually provide some vital lessons in keeping your own home. For example, how much does it actually cost to run your own home? How do you plan for the times when things go wrong? Moreover, by taking on financial and household responsibility from parents (which I am sure would be greatly appreciated, if only for a short time) can leave an aspiring homeowner with a good grounding to go off into the world as a responsible homeowner.
So I’ll leave you with this to think about – what if, instead of talking about how the government can help decrease the gap between the generations, we instead encourage the generations to work together, learn from one another, and create a society that lifts each other up?
Food for thought.