Common misconceptions amongst young people and purchasing a home.
Halifax have recently found that many young adults have interesting – and worrying – misconceptions about the housing and mortgage market.
In fact, 1 in 5 (20%) of youngsters between the ages of 11 and 14 believe the amount they can borrow on a mortgage has no limit, while 33% of this age group expect their parents to cover the entire cost of their house.
These misperceptions in childhood remain in place much into adult life, with a quarter of those aged between 18 – 21 expect that they will be homeowners by the time they are 25. Which, is far younger than the actual average first time buyer in London which is usually 30 or 32 years old.
Despite this, home ownership remains a big aspiration among young people with 59% of 18 – 21 year olds saying that they feel it is important to own a home.
Mathew Wood, Managing Director of Orchards Estates comments “Although buying a property is one of the most important financial decisions you’ll ever make, becoming a homeowner seems like a faraway dream for Generation Z – many of whom are likely to be flying the nest soon.
Although the research has found that the majority of 11 – 14 year olds grasp what a mortgage is, only 1 in 10 of young adults think that stamp duty is money to pay for stamps! It’s clear to see that this age group need some help getting a clearer understanding of what is involved, and plenty of support for them to get their feet on the property ladder”.
Luckily, there is support out there and organisations like Moneywise’s Get Financial Education Working campaign aims to encourage schools and teachers to include financial advice as part of children’s education.