It turns out it isn’t just a taste for avocados that are keeping millennials off the property ladder. The rise in property prices has made it harder to get first time buyer mortgages than in the 1970s.
Related: Calling all first time buyers! You can now pay for someone to find your first home for you
Hands up if your parents have ever told you that you’ll never buy a home if you keep going out for boozy brunches and buying Starbucks coffee? First of all, they’re right. But in your defence buying a home in 2020 is also significantly harder than when your parents were first time buyers.
Image credit: Lizzie Orme
New research from Mojo Mortgages has revealed that first-time buyers have to borrow 18 times more than in the 19070s. Sadly, wages haven’t kept up with rising house prices. The average salaries have only increased by 11 fold since the 70s.
This has made it an even bigger challenge to get a mortgage than in our parent’s generation. Mojo Mortgage used their MortgageScore tool to work out how likely the average buyer would be to get a mortgage compared to in the 1970s.
Image credit: Olliver Gordon
The tool gives a homebuyer a score out of 1,000 based on how likely they are to get a mortgage.
In the 1970s the average first-time buyer achieved a MortgageScore of 977. However, in contrast, the average buyer in 2020 achieved a 313 mortgage score.
It now takes a first-time buyer an additional four years to get on the property ladder than in the 70s. And you’ll probably need to give up a few little luxurious to safe up – goodbye avocado toast.
Image credit: Matt Antrobus
However, 64 per cent of 18 to 34-year-olds have said that they will try to cut back on eating out and takeaways to save for a deposit faster. One in five said they would even get rid of their Amazon Prime and Netflix subscriptions to help save up for a deposit.
Related: Calling all first time buyers! Halifax has launched a new no-deposit mortgage
It might be time we stop blaming avocados and Netflix for our housing woes. Though if you are saving for a deposit they’re probably not helping.
The post The real reason millennials are finding it harder than their parents to get onto the property ladder appeared first on Ideal Home.
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