A third of millennials are counting on an inheritance windfall to ever be in with a chance getting on the property ladder, according to new research from specialist lender Hodge.
Research from the lender among those aged 20–40, found that despite home ownership remaining a key priority, many see a cash windfall as their only route on the property market.
More than half (60%) of those surveyed said they had prioritised buying a home over planning for retirement with 75% only paying the minimum amount by auto-enrolment into their pension. Other life events such as getting married (48%) and having children (32%) have also taken a backseat in the struggle to get on the housing ladder. As a result, a fifth (21%) feel that they will never be able to afford to fully retire.
But, due to the high cost of living (63%), lack of job security (42%) and low wages (40%), just 15% of those questioned had savings of more than £10,000.
The research comes as Hodge data has revealed that 10% of all mature lending customers taking out products such as RIO, Retirement and 55+ mortgages were doing so in order to give a ‘living inheritance’ to family.
Gifting a living inheritance was particularly popular in particular London and the south East, with nearly a fifth (18%) of those choosing RIO mortgages doing so to give gifts to family.
While nearly 71% of those surveyed said they were expecting an inheritance (£86,000 on average), others were being more creative with their hustle to the property ladder. A third (30%) were freelancing or taking on extra work to save for a house, a fifth (20%) were looking at selling items online on sites like eBay, Depop or Etsy, 13% said they had invest in cryptocurrencies and one in 10 (9%) said they were listing spare or unused room in their rented accommodation on sites such as AirBnb.
Matt Burton managing director of mortgages at Hodge said; “With house prices rising steadily over the past few years, it’s no surprise to see younger would-be buyers feeling priced out of the market.
“Ultimately, getting a deposit together remains one of the key barriers for first-time buyers, which means even with initiatives such as Help to Buy and the recent stamp duty changes, there are still a large number of people who would qualify for a mortgage stuck at the bottom of the property ladder.
“Our own data has shown a growing trend towards older people unlocking value in their properties to gift to family and help them get on the property ladder, especially in London and the south East. However, not everyone is in a position to benefit from this, and with inheritance not guaranteed, for many the choice between saving for retirement and owning their own home is an uphill battle which could have a long term impact on an ageing population”
For more information on Hodge, please visit; https://www.hodgebank.co.uk/