Buying your first home should be one of the best moments of your life. Getting those keys in your hand, opening the front door, imagining years spanning out in front of you in a place you can call your own…and not a single annoying flatmate or unreasonable landlord in sight. Bliss! But for too many young people today, the whole process seems daunting, overwhelming and even unattainable. Why? I think I have an explanation – and it’s not entirely to do with house prices. Ever heard of home decor porn?
I meet lots of young (and not-so-young) people as part of my job and always try to get their perspective on the state of personal finance today. What strikes me is how gloomy people of all ages are about millennials’ prospects – particularly on the housing front. The general gist is: “I’m never going to be able to buy my own home.”
I completely understand when I hear this from low earners who are struggling just to survive. But I also hear it A LOT from middle-class millennials who are doing well and may even be able to get help from the Bank of Mum and Dad. And on one level, this really perplexes me. Those more affluent millennials can surely see that things are looking up?
Wages are up, renting is becoming more affordable and the number of first-time buyers has hit a 12-year high. We’re putting more money into Isas than people think (an average of around £6k a year!) and millennials are the least likely to opt out of their workplace pensions (as things stand).
Sure, buying a home has become a more onerous, long-term commitment with plenty of potential pitfalls, like the Help to Buy equity loan scheme. It’s still (arguably) a pipe dream for young people who need to stay in expensive but opportunity-rich areas like London. And there’s evidence that inequalities are widening between those who can get a financial break – i.e. parental contributions towards a deposit – and those who can’t. But the image of a whole generation locked out of the property and savings market is way off-beam.
“Those more affluent millennials can surely see that things are looking up”
Gloomy headlines and show-off influencers
So why has that image taken hold? Perhaps we should look to the media – both old and new. I have noticed in recent years a hardening of the media position on housing, an unshakeable assumption that the housing market has become permanently out-of-reach for millennials. Sure, online stories reflect a more nuanced reality but the more high-profile reports on TV news (which have sometimes featured me!) are consistently downbeat, often repeating assertions that a whole generation may never achieve a “dream” of home ownership.
Hearing that would make anybody feel pretty hopeless, right? That doesn’t mean we should gloss over the realities of house prices, high deposits or strict mortgage regulations. And certainly we shouldn’t downplay the huge flaws of the Help to Buy scheme. But we need to keep remembering how complex and varied the housing market is, how it changes all the time and that buying a home is as much about personal choice as it is about raw economics: would you actually rather rent in area A rather than live and buy in area B?
And ironically, the more that news reports use emotive, sweeping language to reinforce negative perceptions about the housing market, the more that young people will be drawn to (and exploited by) schemes that promise easy solutions – like equity loan schemes.
But that’s just one end of the spectrum. The other end – one I dislike far more intensely – is the absurdly high standards for homes, decor and domestic living now circulating on Instagram and other more superficial social media platforms.
At least the old media is trying (if sometimes failing) to portray the reality of home ownership today. So-called “influencers” don’t even try, for the most part, to make their vision down-to-earth or relatable. Even interior bloggers who emphasise the affordable can end up being more irritating than inspirational: “Look at this fabulous marble coffee table I bought at a junk sale for 30p!” Thanks a bunch…don’t suppose they had a copy that we could all buy? And how many months of trawling car-boot sales and sifting through a gazillion copies of 50 Shades of Grey did that require?Even Alex Stedman of The Frugality blog lives in a roomy and naturally gorgeous North London townhouse that’s about as attainable, for most millennials today, as the Taj Mahal.
“So-called “influencers” don’t even try, for the most part, to make their vision down-to-earth or relatable. Even interior bloggers who emphasise the affordable can end up being more irritating than inspirational”
Enough with the roll-top baths!
I don’t begrudge influencers the right to earn a living – I am a blogger myself and acutely aware of how this new online world can spread positive information and opportunities. And I don’t blame people for wanting some home decor porn in their lives. Like fashion and travel, interior design can be about fantasy and admiration for the beautifully ridiculous, just as it can also fulfil hard everyday needs.
But the two can get quickly mixed up. And just as first-time buyers need to be more honest about how they have achieved their dreams, as my journalist peer Laura Whateley has rightly argued, interior influencers need to come clean about the true cost of achieving home decor porn. For instance, this lady’s home looks a-mazing and good for her, as the piece appears to be publicising her business. Does the article mention the final price tag? No. But it does mention certain items were “bespoke”…
The homeware market in the UK has mushroomed in the last decade, growing from £10.8 billion in 2010 to £13.6 billion by 2018. But how much of this spending is about impressing others online, rather than creating a truly lovable home? Research increasingly suggests my generation is more interested in Instagrammable interiors rather than items that are practical, stand the test of time – or heck – happen to please us, rather than a mass of followers.
And this is where I worry that millennials are adding yet another layer of ambition and pressure to their home-buying experiences today. That constant online imagery showing the perfect (and impractical) homes of influencers…surely it’s having an effect? And surely it’s also putting young buyers on a collision course with their parents, who are prepared to help with the deposit but may not be as happy to shell out for spider plants, kitchen islands, roll-top baths and other fripperies.
“Research increasingly suggests my generation is more interested in Instagrammable interiors rather than items that are practical, stand the test of time – or heck – happen to please us, rather than a mass of followers”
Keep your eye on the bigger prize
The bottom line is this: don’t lose sight of the big prize. Buying a home is a marathon, not a race. Just because you can’t afford all those ‘extra’ touches straightaway doesn’t mean you can’t save up for them (if you really want them)…or create YOUR own little slice of paradise on a real person’s budget. But it could take a bit of time, patience and adjustment of expectations. Home decor porn is attractive but ultimately hollow imagery that can never compete with the real satisfaction of putting together a real, habitable home with quirky flaws and bags of personality.
In my experience, first-time buyers who are well-informed, realistic and use their common sense are much more likely to achieve the one goal that really matters – getting their first home – and far less likely to experience family conflict, stress and FOMO along the way.
Ultimately, I’m hoping we can get more people to move away from craving other people’s homes online to proudly ‘owning’ their own – in all senses of the word!
Here are my tips if you’re feeling daunted by the home-buying mission.
- Make sure…you’re sure! Lots of young people feel they ‘should’ save up to buy their own home – but they don’t really know why. I’d always advocate saving for the future whatever it brings but buying property is both a financial AND personal decision. So really ask yourself why you’re doing it because (shock!) it’s not all about money. Most people are desperate to get out of the rental trap, and it’s true that owning tends to be cheaper than renting because you can pay down your mortgage over time. But buying the wrong place at the wrong time for the wrong reasons could be more damaging in the long run, especially if you borrow excessively in the process.
- Take your time. Research the areas where you want to put down roots. Be objective about the neighbourhood: is it genuinely up-and-coming, with more local investment on the horizon? Is it served by good transport links? Is it near good schools and amenities? Your circumstances might change so it may be unwise to limit your options too much. If that means saving a bit longer to buy a more versatile property (i.e. a two–bed versus a one–bed), so be it.
- Get to know your LTVs. The loan-to-value ratio on a mortgage tells you how much you’ll need to raise for a deposit versus what your bank/building society will lend you. So a 95% LTV mortgage means you’ll have to cough up 5% of the property’s value. The higher the deposit, the lower the interest rate. So you (or your mortgage broker) can find much better mortgage deals if you can save up more – even 10% makes a big difference compared to 5% and reduces your chances of negative equity, should house prices fall below what’s left on your mortgage.
- Look for diamonds in the rough! Many first-time buyers crave so-called “turnkey” properties, with immaculate décor and swish fittings all there as soon as you move in. In truth, you’re more likely to find genuine bargains in more desirable areas if you’re prepared to roll your sleeves up and do some work to the property. This is daunting if you’re not used to DIY but the key is to look for ‘tired’ properties that need mostly cosmetic updates – fresh paint here, new flooring there. If in doubt, getting a full survey done should tell you if there are more structural problems that can’t be easily fixed.
- Supercharge your savings.Once you have your heart set on property ownership, it’s time to revamp your budget so that you can save whatever you can. Slim down your bills by regularly switching energy providers and get to know exactly what you’re spending with the help of clever budgeting apps. Finally, take advantage of free government money with the Help to Buy or Lifetime Isa. The Help to Buy Isa is closing at the end of November so you’ll have to act fast if you prefer this option. It tends to suit those who are buying sooner or are not sure if they want to buy property as it comes with no penalty for withdrawals. The LISA is more rigid, but it allows you to save more for longer, so it’s the better option if you’re really committed to the home-buying dream.
I’ll be speaking at Skipton Building Society’s “Keys to Your First Home” event on Monday 11 November at the Hoxton in Shoreditch, London. The initial batch of (free) tickets have sold out but more will be made available nearer the time – follow Iona at @ionayoungmoney on Twitter to find out when these are released.