Millennials and Gen Z are refusing to give up on their dream of owning a home despite the steep challenges of getting on the property ladder, fresh research has found.
Over 35 per cent of Gen Z and 40 per cent of Millennials think that owning a property is the most effective way to grow wealth, according to data from fintech Revolut.
Young adults’ desperation to get on the housing ladder is fuelled by the belief that owning a home is still easily achievable despite house prices continuing to spiral.
According to Nationwide, the average price of a house in the UK was £271,079 in August.
Mortgage prices also rose sharply, with first time buyers spending on average 44 per cent of their salary on mortgage payments, a stark difference from the long-running average of 35 per cent.
Yana Shkrebenkova, UK chief executive of Revolut wealth and trading, said: “Rising house prices haven’t stopped younger people dreaming of owning a home and seeing it as a way to secure their future.”
The generational property divide
However, older generations do not share young people’s sentiment towards property.
Shkrebenkova said: “Interestingly, older age groups, despite higher ownership…are less likely to consider it as a route to long-term financial security.”
UK homeowners over the age of 60 hold almost £3 trillion in property wealth, of which 98 per cent is mortgage free, but the older generations are taking a diversified approach to boosting their finances.
Over a quarter favour cash savings while 24 per cent opt to invest in stocks in order to build long-term wealth.
Early investing is key
Even though many young people remain focused on chasing home ownership, others are beginning to show signs of following the older generation’s example of being mature investors.
Millennials, in particular, showed themselves to be reasoned investors, being 20 per cent more likely to hold their positions at periods of market downturn compared to other generations.
Shkrebenkova also stressed the importance of investing in the stock market while considering other investment options, due to people being able to “begin at any stage” regardless of their financial and living situation.