People may be wondering why has it become so difficult to get off the mark in the real estate industry – owning a home has become a challenge in itself, especially for young Millennials who are striving to get on the property ladder.
Since the market crash, there have been many first-time home purchasers battling to get what they want – a lot of them are still waiting to be in the right position and others have barely scraped the mark.
It seems that Millennials are the biggest group of first-time buyers in the modern day, however, it hasn’t been an easy process for them and it doesn’t seem to be getting any better. The worst part about it is that a lot of the problems are mostly out of Millennials control, but what are the biggest setbacks?
- University fees are too high – student loans are a big burden for Millennials. Many young people have intentions of bettering themselves and receiving a top-quality qualification but the tuition fees are sky high. It can be very daunting and off-putting, especially for those who earn over the amount upon graduation and have to start paying the student loan back almost straight away. Student loan debt raises the debt-to-income ratio of borrowers which makes it harder for people to qualify for the amount of a loan they’d need. Let’s hope that the tuition fees drop soon to make owning a home a lot easier!
- Credit rating issues – credit rating is important, especially when applying for a mortgage. It frequently happens where a family members use the name of someone else in the family, and if that person has a detrimental effect on the other person’s credit rating, then this can damage the prospects of them ever getting a mortgage. Even at a young age, it’s important to stay mindful of future opportunities, like owning a house. Planning ahead is absolutely crucial.
- Renting is too high – rent in many areas across the country is going up and up. Paying more rent means less money or everything else in your life, so the this makes it harder to ever save for a mortgage. Rising rents are a pivotal problem that needs to be addressed. Millennials who struggle to pay the rent face impossible chances of owning a home of their own and that just isn’t fair at all.
- Competition in the real estate market – it can be excessively off-putting for Millennials who face competition with wealthy investors who have a huge deposit to put down on a property. All-cash offers from investors can be very hard to beat, almost impossible for the majority of the Millennial market, so what can be done about that? Well, on the brighter side of things, cash offers don’t always win – there are a lot of sellers who want to consider all offers from all buyers and not just the ones who wave a lot of cash in front of them.
Stay hopeful and stay optimistic. Although owning a home as a Millennial may seem very far away, working hard towards your dream will eventually get you there. Look for solutions to the problems at hand: opt to rent somewhere cheaper, start putting a little bit of money away for the deposit, search for bursaries for your student tuition fees and protect your credit rating!
Written by Gemma Smith