Home ownership. Living the dream

It’s been a rite of passage for many people of many generations, but in Britain in the 21st century, home ownership is becoming more difficult to make a reality. In spite of adverse conditions in the housing market, including a shortage of suitable properties, rising prices and unfavourable mortgage terms, why do young Britons still aspire to home ownership?

There are many barriers to home ownership for young adults. In the last two decades, there has been a major fall in home ownership in this demographic. In 1997 55% of 25-to-34-year-olds were homeowners, but by 2017 that percentage had fallen to 35%, with the biggest fall among middle-income young people. During the same period, the average property price in England has risen by 173% (after adjustment for inflation) and by 253% in London.

The rise in house prices has been seen to advantage the older generations, while stalling youngsters’ ambitions to get on the housing ladder. With the added burden of tuition fees, for example, if potential buyers have attended university, then the gulf between earnings and house prices is a cause for concern.

Putting down a deposit

Deposits on buying houses has become a problem too. The percentage of youngsters who would need to spend more than six months’ income on a 10% deposit for an average property in their area has increased from 33% to 78% in the last 20 years. The biggest jump in house prices happened in the decade between 1996 and 2006. It has peaked and fallen outside London, the South East and East of England.  There are ways of buying however and the once-vibrant rental market seems to have stagnated too, as savers prefer to try and live at home to accrue funds. In this way, young savers are finding ways to buy, either with help from the parents, or as help-to-buy schemes or shared ownership arrangements. Mortgage companies have found ways to encourage and help young buyers to be able to secure loans and mortgages that means they can now have a place of their own.        

Even a deposit of 10% can be problematic in terms of what’s available. In 1996, for 93% of young adults, borrowing 4.5 times their salary (a usual mortgage ratio of lending) would have been enough to cover the cost of one of the cheapest properties in their area. This is providing they had a 10% deposit. By 2016, this figure had fallen to 61% across England as a whole and 35% in London. The UK government is trying to address this. Potential house buyers are also potential voters and if they feel they are being discriminated against, young savers could migrate to parties with more radical housing policies.

Planning restrictions

Planning restrictions have too long constrained the construction market for visionary builders.

The simple fact is still that we don’t build enough affordable homes. The NIMBY attitude to planning has led to a stagnation of the housing market. The demand is there, but supply is not. We can’t afford to be too precious about our land any longer – we need a new age of building, with vision and flair married to quality and affordability, to ensure young people can realise their dreams of owning a home of their own.

Converted to new-build

Pros and cons of self-build v conversion

It’s an age-old argument as to whether it’s better to start from scratch, or buy to renovate or extend. As to be expected, the answer depends on what you hope to get out of your home and how much money you have available for your project.

Many areas of the north west of England and Cheshire are expensive for land prices, so sometimes buying a property purely to secure the land is a viable option.  In cities land is scarce, so replacement dwelling or brownfield development is often the best option. Brownfield sites, where building has occurred before, but the properties have fallen into disuse and disrepair, are sometimes easier to develop than undeveloped greenfield areas.  

Surveying your options

Your options also depend on the extent to which you want to change the property structurally and aesthetically. Renovation and alteration costs can vary widely. If you’re going to make major structural changes to a building, it may make more sense to knock it down and start again, while with a conversion or extension to an existing property, you have a starting point that you can use as the canvas to create your ideal home.

There are some obvious advantages of newly-built homes compared to old houses. To begin with, new homes are usually more energy-efficient than older houses. They have been built to newer building specifications, using more modern building methods and materials, and have energy saving and conserving tech built into them. They’ll have better insulation, for example, incorporated from the outset – rather than older properties that may have had cavity and loft insulation added at a later date but may not be effectively insulated to the same extend as modern properties, and so not be as energy efficient to run.

Getting connected

New-builds will also have better digital telecommunication and state-of-the-art technology from the outset, such as internet plug-in points or electric car charging points. One day perhaps they will be installed in all new-build properties.

Newer properties, particularly if you’re working with construction experts like our designers at CB Homes, can incorporate the style and elegance of older properties, with the cutting-edge tech of modern-day living. Whichever option you are leaning towards, our specialists at CB Homes can use their years of experience to advise you on how to make the most of your property investment – be it new or renewed.