As per the new research, young people with even 10% deposits cannot buy the cheapest homes in their own area. Institute for Fiscal Studies has analysed that over two decades the prices of the property has been increased by 173%. While the average salary of the young people (25 years to 34 years) got a hike of 19% only, it is depressive.
After the rise in the prices of the homes, another problem, which restrains young people from procuring their own properties, is the deposits. It is really difficult to save from your income when it is not enough for your current needs. Many people, who come under the age group of 25 – 34 years, struggle a lot to save for the deposits. One of the reasons for their disability of saving is the rental costs. People, who do not have their own homes, are living on rents that cost them 140 – 200 pounds every week.
There is an inequality among the age groups for purchasing the property, as it has been recorded that the ratio of young people, who successfully purchase their homes, fall in two decades from 55% to 35%. Consequently, the rate of household for people aged from 65 years to 75 years has risen to 80%. This inequality must not be included in the economy, as it is dampening the scope of living in own house for a particular age group.
Why the prices are rising?
One of the reasons for the continuous rise in the price is that the supply of the homes is limited. There is an indirect relationship between price and supply. Supply decreases price increases, supply increases, prices decreases. When the supply remains constant, the price is also constant. The supply of the homes is limited, due to which the price is continuously rising. It is a threat for the young individuals, as they are unable to save for the deposits.
Price and income gap:
Price is high and the income is low. The margin between the price and income is high, which is the reason of the failure of the young individuals not to buy the property for their personal use. As in a recent article, it was noted that the unemployment rate is falling but the income is not increasing. It means the focus of the economy is on the jobs of the people but their financial conditions are not coming in the consideration. Maybe there will be some solutions come in the future to improve this situation.
Suggestions by experts:
The think tank suggests that there should be 100% relief to the people on capital gain taxes. The cost of the capital gain taxes fall high to the renter, this is why the cost of the rent and house increases. The relaxation from taxes will encourage the seller of the home to charge reasonable prices and will bring ease for the buyer to purchase it on the lower amount than before.
In a solution, Registration Landlords Association is ready for the lower taxation.
If you want to purchase a home right now:
People, who have desire of purchasing a home right now or need to arrange the cost of the rent, need not to be worried about the funds. They can approach the online lenders for the secured loans and get the funds to be given to the homeowner. It might be difficult for you to borrow a loan for purchasing your own house, as you will have to submit any security equals to the amount of the loan. You may be asked to show a guarantor who may be impossible as the amount is high. Anyway, make your own choices and reach to the safer zone in your life. Show your citizenship of the country, age proof of 18 or above, credit scores, income status to the lender and boost the chances of living comfortably in a home, for which you have paid.
The Final Analysis:
If the supply of the loans increases, the price can calm down. The suggestions of the experts should be taken into the considerations so that the young generation can also live with no worries and stress.
Always keep login Big Loan Lender for more information.