Property: To Buy or Not to Buy? Ask Generation Y


Generation Y are the 30-somethings often fighting a losing battle against home ownership. But thanks to FinTech start-ups, a solution may now be on the table.

A recent article by The Standard has caught the eyes of many. Titled “Exodus of 30-somethings from London,” Jonathan Prynn rightly dramatises the level of anxiety young adults feel in the face of today’s property market. (1)

But this likely isn’t news. Many have known this long before so called Generation Rent. And we were reminded of this when the Guardian blamed Generation Y’s anxiety on the property market, calling it the “mother lode of uncertainty,” because for 30-somethings, “the idea of buying a house is laughable.” (2) We may also know that London in particular, is often labelled as the biggest culprit.

What is likely news, however, is how staggering the situation has now become. The Standard noted a net outflow of 30,140 London residents last year. To put this in context, 3 years ago this figure was shockingly half the size. (1)

Betsy Dillner, director of Generation Rent, said, “These people are leaving friends and family in order to find a home they can afford, and some are leaving their jobs. This should worry everyone in London.” (1) The migration is clearly founded in a pressure to own the home you live in. And according to the Londonist, it’s only going to get worse. Apparently, “First time buyers in London will need a salary of £106,000 and a deposit of £138,000 to get a property in 2020.” (3)

Of course, you could buy outside of London. Research shows you could save up to 60 per cent on buying a home outside of the capital in areas like Wellingborough and Peterborough. (4) It’s a classic city-worker fantasy: move to a house in the countryside, exchange sirens for serenity and trade in a grubby car-park view for one that includes a dog prancing around a herb garden. In the decision to relocate, money might not be the only thing you gain. Andrew Mason, from Lloyds, notes, “The decision of whether to live in the city or further away is not simply a trade-off between financial costs and journey times. Quality of life is also a major factor: family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation.” (5)

But everything comes at a cost, including this, as you may have introduced a 2-hour commute to your day. (5) In addition, the permanency of buying is likely to just heighten Generation Y’s stress levels, which is true in Stuart Heritage’s case. He notes how, upon buying his own home, he was greeted by “buyer’s remorse,” not the joy of abandoning the “myriad ills of ballooning house prices and dingy buy-to-let empires.” He feels as though he’s traded in the freedom of renting for “decades of impossible debt.” (6)

Perhaps then, location isn’t the issue, buying is. Home owning is unattainable unless you can scrape together a substantial amount of money in the first place. It’s no surprise that many 30-somethings have given up on owning a home entirely. (7) Consequently, diversifying your investment portfolio is almost out of the question. Home ownership also comes with a series of downsides, which Stuart Heritage discovered the hard way, as he regrettably explained his newfound responsibility of repairs and maintenance. (6) In addition, there’s decreased mobility, even in the face of annoying neighbours, and the gloomy possibility of foreclosure. (8)

It’s this exact premise upon which property crowdfunding has gained such momentum. Amongst revolutionary tech-startups, property has been democratised. You can, at the click of a button, become a homeowner from just £10, and start earning regular income from your investments. The concept can give you the freedom to city-hop if you don’t like your neighbours, have your landlord on speed dial for repairs and also get a foot in the door in investments.

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