Statistics reveal on average a semi-detached house in the UK will cost approximately £225,674 – with reports showing one in three millennials (those born from 1977 to 1995) will never own a home.
A new study from TotallyMoney suggests how different the current generation spending and saving habits are, with many overspending and chancing away their ability to own their first home.
How much are millennials saving?
The average British citizen puts away £183.50 into their savings account every month with most of these people blaming their expensive spending habits rather than lack of funds.
Only 3% of people who were born in or before 1945 would run out of money before payday, compared to 24% oF millennials saying they run out of money before payday.
Rental costs are on the increase and so too are fares for transport thus making saving for a deposit on a home an impossibility to reach for many millennials. According to statistics from ONS – 67% of people aged 25-34 were homeowners in 1991, but by 2014 this figure declined to 36%.
There was a dip from home ownership at the age of 16 to 24 years old from 36% to 9% and even those in the 35-44 year age group also saw a drop from 78% to 59%.
How long does it take to save for a home?
The average UK salary is approximately £27,600 with the average rent costing £928 per month; the average spend on food, transport and bills can add up to around £1,372. Going back to the statistics provided by TotallyMoney the average millennial saves £176 each month meaning to raise 10% of a semi-detached house costing £225,674 it would take around ten years.
Currently, the rent cost in London for a semi-detached house is £1.619 a month, with the average cost to buy one at £580,930 – this means on average people are left with only £618 per month to cover all their needs.
With these statistics in hand, to get a 10% deposit (£58,000) of a London Home, it would take the average millennial 27 years of saving £176 per month to secure their first home.
Henry Keegan from TotallyMoney commented: “Property is certainly more expensive than ever, and interest rates are notably low at the moment – both of which make it hard for younger people to be as well off as their parents or grandparents.
“But there is a noticeable trend that younger people might not be acting with a clear view towards saving for the future. Whether it’s higher spending on unnecessary purchases or an approach to spending which means that they run out of money when they need it, their spending habits may not always be in their best interests.
“We encourage everyone to do research, keep a budget, and use helpful tools to ensure they’re making smart financial decisions.”