Inheritance plays a major role in helping ‘generation rent’ buy their first home
The Government’s English Housing Survey, published on 1 February, reports an increase in the number of people taking out mortgages – the first increase for a decade – as the rent market stalls.
The report echoes research conducted by the property law firm Collyer Bristow and published in its Home Ownership Attitudes and Aspirations report, which shows that home ownership remains the ultimate goal for young adults living and working on London and the South East. Surprisingly, inheritance plays a major role in buying a first home.
Janet Armstrong-Fox, Head of Private Client Property at Collyer Bristow said:
“Our Home Ownership Attitudes and Aspirations report showed that 73% of men and 57% of women hope to buy their own home within the next five years.
“Personal and joint savings lead the way for those intending to purchase a home (62%). The ‘Bank of Mum and Dad’ also plays an important role, with 32% receiving help from their parents to fund their purchase.
“One statistic that did surprise us was the high number of purchases reliant on inheritance: 31% of homeowners had inherited property or cash and a further 21% expect to inherit property or cash to fund a property purchase at some point in the next five years.”
Whilst the Government’s English Housing Survey reports a slow-down in the private rental market it would be wrong to write it off just yet.
“Whilst just 1% of our survey panel currently lives in a co-living scheme, 74% would consider co-living at some point in the future, attracted by a fixed monthly fee for a room with good facilities in a central location. Individuals may have home ownership as their ultimate goal, but they are prepared to rent and rent for longer before stepping onto the housing ladder.”
Headline findings from Collyer Bristow’s Ownership Attitudes and Aspirations report:
- 100% of 20- to 24-year-olds hope to buy their own home, falling to 59% for 25- to 34-year-olds.
- Just 9% have no aspirations to buy their own home at all.
- Price (77%) trumps location (61%) when choosing a home.
- New homes predominantly funded by savings (63%) and almost a third supported by the ‘Bank of Mum and Dad’ (32%).
- 31% of current homeowners inherited their property or funds to enable a property purchase.
- 74% would consider living in a co-living build to rent scheme.
Collyer Bristow’s Ownership Attitudes and Aspirations report is based on a panel of adults aged between 20 and 44 living and working in London and the South East living both in rented accommodation and their own homes.
Kindly shared by Collyer Bristow LLP