I'm a money expert – here's what first-time mortgage buyers should know about Andy Burnham's policies
A money expert has shared her thoughts on what new Prime Minister Andy Burnham might do for first time buyers as new research shows only 15 percent of young Brits believe homeownership is achievable for them.
Laura Ann Moore, a qualified money coach and financial wellbeing expert, says there’s an entire generation who are ‘doing everything they’ve been told to do’ but are still finding themselves locked out of homeownership due to the cost of living and an increasingly volatile housing market.
This week, the UK got a brand new Prime Minister in the form of Andy Burnham, who has already announced he’s scrapping VAT on household electricity bills.
And Moore said the new PM has already floated a few notable housing-relevant policies that could help first-time buyers, including potential rent controls on the private sector, stricter enforcement on landlords, and possible stamp duty reform or a switch to a land value tax for first-time buyers.
Advert
She told LADbible: “If any of this actually lands, it could ease real pressure, stamp duty reform would cut upfront buying costs, plus lower energy bills would boost disposable income for saving and rent controls would free up money currently swallowed by rising rents - creating more disposable income to save for ownership.”
However, she also warned that Brits should exercise caution until anything is set in stone.
“None of it is confirmed policy yet, it's mostly proposals and direction of travel, and even the most promising ideas could take years to materialise. So while it's a hopeful signal, the sensible line for young people right now is to keep planning around today's reality rather than waiting on policies that may or may not arrive.”
It's not just about skipping coffees...
Moore said that saving for a house deposit can be overwhelming before you even get started and that rising house prices can make it feel as though the goal posts are moving.
Time and time again, younger people are told to budget better or cut back if they want to get onto the property ladder, but in many cases people feel that they are doing all the right things and still not making any headway when it comes to saving.
Moore told LADbible: “It's not always about habits or behaviours. If wages aren't rising in line with the cost of living, you don't have the extra disposable income to work with in the first place.
"You can budget perfectly and still not have enough surplus to save meaningfully for a deposit, because sometimes it's simply not about willpower, it's about how much you're bringing in each month versus how much life costs.”
Moore also points to a ‘generational gap’, which means older people who bought their houses years, or even decades ago, can have a warped view of the market.
Add into that many people don’t have financial support - aka the Bank of Mum and Dad - and that more people are single than ever before and it quickly becomes clear why so many younger folks feel completely locked out of homeownership.
Almost four out of 10 young Brits have less than £50 at the end of the month
Moore has spoken out as new research from London-based housing association NHG Homes found that 38 percent of non-homeowners aged 20 to 35 years olds have less than £50 left at the end of the month and 19 percent have nothing at all.
Meanwhile, two in three (66 percent) think that they’re ‘doing the right things financially but still not getting ahead’ and only 15 percent believe that homeownership will ever be achievable for them.
The research also revealed that 63 percent believed financial stress has damaged their mental health.
Moore agrees that this sort of worry and stress is ‘rampant’ amongst younger people.
“I think that a huge part of this is generational,” she said.
“There's a real gap between what our parents and grandparents could afford and what we can afford today. House prices have moved completely out of step with our average wages, job security coming out of university is nearly non-existent (despite the fees being higher than ever), and the cost of simply existing has gone up massively in the last few years.”
She also suggested that social media plays as role as we're seeing more of other people and can become bogged down by the idea of how we should be living.
Some tips for would-be homeowners from the expert
When you read stats like those above, it can be easy to feel overwhelmed, but Moore has shared some tips that she offers to those she coaches.
- Don't wait for the ‘perfect’ moment to start saving. Start small and start now, because momentum matters more than the amount at first. Everyone has to start at £0
- Don't compare your timeline to everyone else's. Social media makes it look like everyone your age is buying a house, when in reality, most people are struggling with exactly the same thing.
- Don't rule out alternative routes onto the ladder, like shared ownership, simply because they're less talked about. A smaller deposit requirement can shave years off your timeline
- Don't let shame keep you silent. Talk to people about where you're really at financially. You'll likely find you're far less alone in this than it feels.
- Don't assume it's a personal failing if you're struggling. The research is clear that this is a structural issue, cost of living, wages and house prices, not a discipline issue.
- Remember to reach out, lean on friends, speak to people who are on the property ladder and find out their story - lean into online communities.
- Get a deep connection to your WHY - why do you want to own a home, what feels exciting about that, how can that energy and emotion behind your goal be your guiding light as you save for a deposit.
Claire Reid