Owning a home is a goal shared by many Britons, reflecting the values of past generations, who looked upon the milestone with great anticipation. Although it remains an important pursuit for some prospective buyers, modern consumers view home ownership through a different lens, particularly following the massive global mortgage meltdown experienced in 2008. The dire consequences of mismanaged debt and the impacts of unsafe lending practices made an impression on would-be homeowners, prompting many to ask whether or not the benefits of ownership outweigh the risks and perils associated with the major financial commitment. Current trends reflect a challenging housing environment, particularly for young and first-time home buyers.
Is Buying a Home a Good Idea?
Measuring the pros and cons of home ownership accounts for wide-ranging concerns, falling into a few distinct categories. Lifestyle considerations are of course paramount, making home ownership a highly personally endeavor. And short-term financial benefits are another important consideration for those contemplating ownership. Tax gains may result from a purchase, for example. The value of your house as a long-term investment must also be factored-in to purchasing decisions.
Your personal circumstances weigh heavily on housing decisions. If your job calls for frequent travel and the flexibility to relocate, for instance, it may not be in your best interest to sink deep roots at one address. On the other hand, when your long-term housing forecast doesn’t include a lot of moving around, you may choose to make deeper commitments in a particular locale.
Does your family vision rely on residential stability, providing a foundation for a close-to-home lifestyle? Or are you inclined to be less tied-down, content with a flat or apartment? Answering these and other relevant questions can help you determine whether or not home ownership is your best approach. And since saving a deposit and building credit take time, the sooner you define your residential dreams, the better chance you have of one day closing a successful deal on a new house.
Although financial matters are an important thing for would-be home buyers to think about, mortgage payments are not the only responsibility that comes along with home ownership. Property is not a passive investment. On the contrary, care and maintenance call for devoting substantial time to your home, keeping it in a state of good repair and updating dated features, as needed. If you are DIY owner, nights and weekends will sometimes be spent keeping-up with your property – painting and making repairs, for instance. And the responsibility extends beyond your front door, calling for yard care and landscaping chores. If you’d rather leave these duties to the landlord, home ownership may not be your best approach.
Trends Among Buyers
The mortgage meltdown of 2008 took its toll on the global housing industry, leading to large decreases in property values across the UK. As conditions have partially recovered, home prices have continued to rise, leading to some shifts in traditional buying trends. The number of mortgages issued to first-time home buyers, for example, remains at a level seen prior to 2003, indicating fewer young buyers entering the real estate market. A lack of affordable housing may be partially responsible, but the trend may also show a value-shift among the younger generation. In 1991, for instance, 67% of the 25-34 age group were home owners, compare to a scant 34% at the end of 2014.
Rising home prices have undoubtedly kept some young investors off the property ladder, making it more difficult to enter the market. The outlook for house prices remains unclear for 2017 and beyond, with general economic conditions, interest rates, Brexit, changes to buy-to-let laws and other factors coming to bear on house price trends. Continued inflation, for instance, could further constrict access for some of the same groups having difficulty breaking-in to today’s market.
Demand for affordable housing is healthy, yet some first-time buyers are reconsidering home ownership altogether, favoring alternative arrangements – at least for the time being. Whether it is a long-term shift in how a new generation values home ownership or a fleeting symptom of fragmented economic recovery is yet to be seen. It appears would-be buyers are managing their expectations in the meantime, realistically weighing their options.