Young people who fail to buy a home by age 29 could leave their children unable to get on the housing ladder in future, according to a new report on the long-term consequences of the property crisis.
The study exposes a striking divide between property haves and have-nots in their 20s and 30s – and suggests that the impact will be felt by subsequent generations.
The report found that the average age of a first-time home buyer is now 29, just a year older than it was 30 years ago. These are the so-called property haves who are likely to follow a fairly conventional path through the housing market. It will see them buying their second property – a larger family home - by the age of 35 and being mortgage-free by the age of 60.
Their parents’ generation were able to buy at 28, move to a second home at 31, and pay off their mortgage by the age of 56. That’s led to a “golden age of inheritance”, according to the report, with the current generation of 25 to 36-year-olds benefiting from the property wealth of their parents.
Indeed many have turned to the Bank of Mum and Dad to help with the cash needed for a deposit on a home.
But the property have-nots are waiting until 35 to buy their first home, mainly because they haven’t been able to raise a deposit. That’s because they can’t afford to save or can’t turn to parents for financial help.
The delay will mean they won’t move into a decent-sized family home until they reach 42. As for being free of mortgage debt, they will have to wait until they reach 67 and a half.
That extra seven and a bit years is likely to hit their ability to help their own children get onto the property ladder, leaving them the legacy of being property have-nots in turn.
Delaying getting on the property ladder could impact the number of children people have or when they have them, the report says.
Children of the current property haves are likely to be in their early 30s by the time their parents have paid off the mortgage.
Pete Dockar, head of mortgages at HSBC, which commissioned the study, said: “Home ownership continues to be an aspiration for the majority of young people. This study shows postponing their purchase has long-term implications not just for their future property ownership, but their ability to help their own children step onto the ladder.”
Recent surveys have reported that first-time buyers are returning to the housing market.
But official figures have revealed that more than 3.3 million 20- to 34-year-olds were living with their parents last year in the UK.