A rising number of young people are forgoing higher education in a bid to get on to the property ladder, according to a new set of figures. The Next Generation of Homeowners Report by Lloyds TSB indicates that one in ten of those aged 18 to 24 are sacrificing going to university in a bid to save up money for their first home. Findings from the financial services company also revealed that one in five 22 to 24-year-olds are actively redirecting contributions that were intended a pension scheme towards making the first down payment for a home.
Meanwhile, some one in six respondents were also reported to be juggling two jobs so as to help build a housing deposit and meet secured loan costs in the future. Just over half (55 per cent) of young people believed that to be able to afford their first property they would need to earn at least 30,000 pounds a year. Research also revealed that a third of under-25s believe that university tuition fees should be reduced to help them purchase a home, which could see them handle post-graduation debts with greater ease and in turn allow them to become more able to meet deposit and home loan costs.
Alison Burns, mortgage sales director for Lloyds TSB, said: "The fact people are willing to forgo their education highlights the importance of homeownership to the younger generation." However, Ms Burns claimed that such "extreme measures may not always be necessary", pointing out that a significant number of potential first-time buyers hold misconceptions about the property market.
Some 65 per cent of those surveyed by Lloyds TSB claimed to believe that putting down a ten per cent deposit is an "essential requirement" to get approval for a mortgage, but she iterated that "this is not the case".
Although the study indicated that the majority of lenders will consider applicants who have some "low-level" credit problems such as outstanding student Loans, more than half of respondents think that they must be debt-free to meet secured and home loan requirements.
Meanwhile, some further two in five were reported to wrongly believe that they need three years of continuous employment to qualify for a mortgage. The director also claimed that first-time buyers should look to seek out advice "before making a decision that could affect their long-term future".
Overall, purchasing a home was ranked as the top aim that consumers aged 18 to 24 wish to achieve before they are 30 - accounting for some 75 per cent of respondents' votes. Goals such as getting married and travelling the world were favoured by 64 and 44 per cent respectively of under-25s.
Earlier this month, Vince Cable, shadow chancellor for the Liberal Democrats, claimed that young people are taking out Secured Loans at levels which are "ludicrous and dangerous" in an attempt to buy their first home. He added that if the Bank of England opts to increase interest rates in the future many homeowners will not be able to meet mortgage costs, pointing out that the level of property repossessions over the past two years is "soaring".
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