The 2014 Homeowner Survey has revealed some startling statistics with regard to the state of the property market – and more importantly the people who currently have mortgages.
The opinions and feelings of those in the age group 25-34 make stark and worrying reading. For example 70% of homeowners in this age group stated they had used one or more methods to make it more feasible and affordable to buy their own property. Typical examples included loans from parents, low interest mortgages and mortgages taken over more than the typical 25-year period. Indeed young people in this age group are far more likely than those of other ages to have used some form of assistance in helping them buy their own homes.
Nearly 50% of those questioned had worries about future affordability
This is a massive percentage and it shows how concerned young homeowners are in this age bracket. They are concerned that they may not be able to afford to pay their mortgages in the future. This stems from the fact they have had to rely on the financial help of others to buy a property to begin with. This is in stark contrast to 30% of all homeowners in the UK admitting to the same worry.
We know the Bank of England is likely to consider putting interest rates up in the fairly near future. This too was reflected in the information gleaned from the Homeowner Survey. Again the figure for the UK in general was around one in three (34%) among all homeowners. However those aged 25-34 were far more concerned, with 49% worried about the effect a rise in interest rates would have on their ability to repay their mortgages.
The desire for home ownership
This is still a strong desire in the UK, despite the many challenges the housing market presents. Indeed it ranks as the top concern for those who were questioned for the survey, with 87% of those questioned choosing this as their uppermost concern. Furthermore a little over half of those who want to buy their first property have voiced their concerns over the level of house prices at the moment.
Location, location, location
The location of those questioned also had an effect on their opinion of whether a rise in interest rates would affect their ability to meet their repayments. Perhaps not surprisingly, those in the East of the UK were most worried, with 47% expressing concern. The North of the UK came next with 34%. London actually fared a little better on 31% – the same as those in Scotland. The Midlands came in with the lowest percentage at 29%.
Clearly young homeowners in particular are most concerned about their situation with regard to the size of their mortgage debt. Some of those questioned said their household budgets were already squeezed, and higher mortgage payments would result in a difficulty to pay back what is already owed. There could be troubled times ahead if rates do increase.