Why aren't millennials buying homes? — Transcript

Full transcript

1. 0:00let's say you gathered a hundred 25 to
2. 0:0335 year olds on average salaries how
3. 0:06many do you think would own a home the
4. 0:09answer is only 27 but just 20 years ago
5. 0:1365 of this group would have been owners
6. 0:16and that's a huge drop of nearly 40
7. 0:19percent our young people just not into
8. 0:22ownership well half of all Millennials
9. 0:25listed is a top priority higher than
10. 0:27both kids and marriage in fact only nine
11. 0:30and a hundred say they have no desire to
12. 0:32own at all so why aren't they buying
13. 0:35houses I mean the answer is obvious
14. 0:38wrong priorities lazy avacado references
15. 0:45aside the question is have young people
16. 0:47been kicked off the property ladder and
17. 0:49if they have what are the implications
18. 0:54so young people are doing a few things
19. 0:57later than they used to they're entering
20. 0:59the workforce at 19 that's a year and a
21. 1:01half later than two decades ago
22. 1:03they're also coupling later and having
23. 1:05kids later
24. 1:06so perhaps buying a house later is just
25. 1:09part of a wider pattern of doing things
26. 1:12later but remember young people want to
27. 1:15learn also that housing graph looks a
28. 1:19lot steeper than the rest to get to the
29. 1:21bottom of this let's do some maths
30. 1:24[Music]
31. 1:28let's imagine the Millenial wanting to
32. 1:30buy an average house on an average
33. 1:32income with no outside help is that
34. 1:35possible well the good news is they're
35. 1:38richer than twenty years ago twenty two
36. 1:40percent richer in fact they need a
37. 1:43deposit though so let's see how much
38. 1:45they could save each month first out
39. 1:47come the basics things like taxes
40. 1:49pension contributions perhaps even a
41. 1:52student loan then this rent and to save
42. 1:55money they're sharing but then there's
43. 1:57also the cost of living things like
44. 1:58bills basic living expenses these
45. 2:01numbers come from the Joseph Rowntree
46. 2:03Foundation they interviewed a
47. 2:05cross-section of the British public to
48. 2:07work out the absolute minimum you need
49. 2:09to have an acceptable standard of living
50. 2:11you know without having to be a complete
51. 2:13hermit admittedly it doesn't leave room
52. 2:17for that much but it does mean they're
53. 2:20saving nearly a quarter of their
54. 2:21take-home pay not bad
55. 2:23so let's find an average house to buy
56. 2:25now for the bad news
57. 2:27house prices have risen a hundred and
58. 2:29fifty two percent over the same period
59. 2:32meaning while house prices were once
60. 2:34four times average income they are now
61. 2:37eight okay some good news and some bad
62. 2:40news then but let's see how far our
63. 2:43average salary and nearly four hundred
64. 2:44quid a month savings will get us towards
65. 2:46our average house so assuming a mortgage
66. 2:50of four times income that still leaves
67. 2:52quite a deposit to save and at this rate
68. 2:54it'll just take two hundred ninety-one
69. 3:00months wait a minute that's twenty four
70. 3:03years okay okay I can literally hear you
71. 3:10typing out your comments now and it's
72. 3:13not that no-one could get on the
73. 3:14property ladder there are things you can
74. 3:16do but the point is is that it's become
75. 3:20much harder to get on the ladder which
76. 3:22means less ownership and a lot more
77. 3:24private renting
78. 3:26so what are the implications showcase
79. 3:34data suggests that the number of
80. 3:36children born into private rentals has
81. 3:38doubled in just over a decade
82. 3:40now this is not ideal when research
83. 3:42shows that private rentals are the least
84. 3:44secure poorest quality and most
85. 3:46expensive of our housing stock but even
86. 3:49more concerning is that it's forecast a
87. 3:51third of all Millennials will still be
88. 3:53renting when they retire now people's
89. 3:56incomes typically have in retirement
90. 3:58which is manageable if you paid off your
91. 4:01mortgage but it's not so great if you're
92. 4:04still paying rent and so paying private
93. 4:07rents as a pensioner will require a
94. 4:09bigger pension pots nearly half a
95. 4:11million quid says one study so to cover
96. 4:14the shortfall the already large housing
97. 4:17benefit budget might have to grow by a
98. 4:19hundred and fifty four percent all of
99. 4:22this speaks to general concerns about
100. 4:24societal inequality just one in ten
101. 4:28twenty five to thirty four year-olds
102. 4:30earn enough to get on the ladder
103. 4:32intergenerational wealth is a major
104. 4:35boost two of those on the ladder 62
105. 4:38percent have been helped out by parents
106. 4:40or friends whereas only 6% of the over
107. 4:4455 did that the impact of this initial
108. 4:47boost is so stark the Resolution
109. 4:49Foundation have said inheritance from
110. 4:52family may have more of an impact on
111. 4:54individual's lifetime living standards
112. 4:55than how much they earn so perhaps it's
113. 4:59no wonder that seventy percent of
114. 5:01Millennials believe the dream of owning
115. 5:03a home is over
116. 5:14you