The Changing Landscape Of Home Ownership
“The Forever Home” was the 20th Century’s symbol of stability and wealth. Thanks to easier access to mortgage credit, the allure only grew stronger as the decades passed.
Now in the 2020s, it ought to be the millennials’ turn to live out the homeowner’s dream, complete with mortgages, families, and dogs to boot. But somewhere along the way, this ideal faded.
Here, we’ll look at what changed for this age group and how their shifting values are changing the landscape of homeowning in the UK.
The Defining Characteristics of Millennials
Millennials, also known as Generation Y, are those born between 1981 and 1996. Currently sitting between the ages of 28 and 42, they are the most populous generational group in the UK.
Reaching peak home-buying age, yet burdened by student debt and financial uncertainty, only 38% of them own a home. A stark drop compared to Boomers, 61% of whom owned a home before they turned 35.
Gen Y’ers are facing a set of obstacles unique to their predecessors and it’s changing what owning a home means to them. These new values are often at odds with the traditional pathways of real estate, and pressure is mounting on the industry to come up with solutions. Let’s take a look at the ways these have already started to take shape.
Flexibility
32% of UK millennials desire most to live in London, with the remaining majority wishing to live in another metropolitan area. This leaning towards urban living is challenged, however, by the 518% rise in house prices in London – over 200% higher than the rest of the country. On top of this, the rise of hybrid working paired a delay of life milestones by up to seven years make for a key value unique to this generation: flexibility.
The freedom of movement in home-owning suits this group’s fluctuating life trajectory. Marked by having non-linear careers and unable to afford their most-desired urban centers, this cohort moves more and moves faster.
While this behavior naturally fits with renting, recent solutions to make selling homes a more flexible process are attracting millennials to the housing market. Services acting as cash house buyers are addressing this demand for flexibility. This solution allows sellers to avoid a property chain, and skip the grueling cycle of home stagings, lawyers, and hidden fees.
With the “forever home” out the window, cash home buying caters to millennials’ desire for a less complicated, more transparent path to changing their living situation frequently and speedily.
Efficiency
The need for speed has driven changes in other areas of the housing market, too. Property technology, or PropTech, has been a key contributor to the cause. House viewings have been replaced with virtual tours and 3D imaging, allowing tech-savvy millennials to explore properties from the comfort of their homes.
Online listing platforms are also playing an important role in simplifying the property search process. Other than optimizing search filters to align with millennials’ needs, these platforms have also incorporated customizable promotional campaigns. Using data analytics, sellers can advertise a property listing, anywhere from mailing lists to Instagram, specifically targeted to only the most suitable demographic for that property.
Personal opinions on targeted ads aside, this can be equally beneficial to a prospective buyer receiving these ads, by streamlining their options down to a manageable and viable few with no effort on their part.
Sustainability
Another value central to millennials is sustainability. This broad umbrella term all boils down to what keeps this generation up at night. A home already fitted out with renewable power and energy-efficient appliances not only serves millennials’ eco-conscious buying habits but also guarantees protection from both the energy bill spikes and income dips.
Technology and efficiency play a part once again as millennials have higher expectations in a home’s automation system. This may be as simple as a smart meter for heating and electricity, all the way up to fully automated wiring for lighting, devices, and appliances, controlled through a virtual assistant like Google Home. A home fitted in this way reduces energy waste, alleviating the two great fears of millennials by saving both money and the planet.
Embracing The New
Breaking away from traditional ideals, millennials are redefining home ownership by demanding more flexible solutions to moving, efficient methods of selling, and sustainable ways of living both environmentally and financially. With the housing market adapting to their needs, more innovations are expected as millennials occupy greater purchasing power as time goes on.
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