A third of Millennials will never save enough money to buy their own homes, an ABC Finance study revealed.
Generation Y, those aged between 23 and 38, have to save for an average of eight years and four months in order to afford the average mortgage deposit of £42,836.
And half of this generation, also known as Millennials, will only be able to buy their own home after they reach their forties, according to loan broker ABC Finance.
But, while less than 30 per cent of Generation Y can expect to stop renting by the age of 30, more than 50 per cent of baby boomers, born between 1946 and 1965, owned a house by that age.
The amount of time it takes to get a foot on the property ladder is less in the north of the UK than it is in the south with millennials in London saving for almost 16 years before scraping together a £82,352 deposit for a home worth £411,760
A total of 25 per cent of single renters will still live in a flat or house-share even when they reach the age of 35.
Gary Hemming, commercial lending director at ABC Finance Ltd, told Mail Online: ‘Generation Y are the first generation who are looking to buy their first home, having not benefited from the previous house price boom.
‘Naturally, this is proving to be a tough task with rental prices eating up a large chunk of the average disposable income.
‘As such, saving a deposit is an uphill struggle for first-time buyers. The combination of high property prices, largely fuelled by investors, and stagnant earnings means that buying your first home has never been more difficult.’
With a large amount to pay in rent each month many millennials find it difficult to save the recommended 20 per cent from each pay packet (file image)
With a large amount to pay in rent each month many millennials find it difficult to save the recommended 20 per cent from each pay packet.
And from an average salary of £25,920 it could take eight years and four months to save for a £42,836 deposit.
The amount of time it takes to get a foot on the property ladder is less in the north of the UK than it is in the south with millennials in London saving for almost 16 years before scraping together a £82,352 deposit for a home worth £411,760.
With an average salary of £25,920 it could still take eight years and four months to save for a £42,836 deposit (file image)
Meanwhile those in north eastern England must save for four years and 11 months for a 20 per cent deposit of £25,162 for a £125,813 house.
A spokesman for ABC finance said: ‘Last year saw a lot of coverage aimed at ‘generation rent’, implying that younger people were content to stay in rented accommodation with no ambition towards buying.
‘The truth is that many don’t have the means to save for a deposit and can be left having to rent a property with issues ranging from the dwelling itself to the landlord that maintains it.
What is the difference between Generation X, Y and baby boomers?
Generations are a group of people who were born around the same time and place – though the exact dates for when each generation starts and another ends are uncertain.
They usually have certain characteristics in common.
But who belongs to what generation and what characteristics are associated with each age range?
Generation Z, iGen, or Centennials:
Born 1996 – present day
Those born after 1996 are growing up in a world that has always been associated with technology for them. They are the most connected, educated and sophisticated. Known as the most open minded generation to date.
Millennials or Generation Y:
Born 1977 – 1995
Those aged between 23 and 42 have been described as the Peter Pan or Boomerang Generation as they commonly move back to live with their parents. There has also been a delay in getting married or starting a career. They are thought of as lazy, narcissistic, and prone to switch jobs quickly. But they are also open minded and look for more of a work-life balance.
Born 1965 – 1976
Known as the ‘middle child’ of generations they are often forgotten. But those aged between 43 and 54 are more ethically diverse and better educated than the Baby Boomers. More than 60 per cent went to university, according to thebalancecareers. They are independent, resourceful and self-sufficient.
Born 1946 – 1964
The term ‘baby boom’ was coined after the drastic rise in the number of births after the end of the second world war. Aged between 55 and 73 this generation have a strong work ethic, are self-assured, competitive and goal centred. They often put their career above everything.
Traditionalists or Silent Generation:
Born 1945 and before
Those aged 74 and above were expected to be seen and not heard growing up. They were the ‘silent generation’. A strong work ethic, tough, and resilient this group saw work as a luxury and are some of the wealthiest members of society. Loyal employees they respect authority and work long hours.
‘Essentially, it’s less of a generational attitude and more down to the fact that property ownership is out of most people born after Gen X’s grasp – especially for those not born into a family of wealth or property assets.’
For those stuck in a cycle of renting ABC Finance found landlords were allowing their tenants to live in falling down houses and unsanitary conditions.
George, 28, rented a house with four friends in Birmingham. By the end of one year they had mice in the kitchen, damp, water pouring down the wall and mould.
He said: ‘We had to get the council involved to enforce the landlord to deal with the damp problem.
‘We all fell out so spectacularly due to the stress of it all that one of my roommates moved out mid-year, and I left no longer speaking to any of them.’
And Rachael, 26, rented a flat in West Hill, London, for eight months before 243 unresolved complaint emails forced her to leave.
She said: ‘I had a nightmare eight months in my flat in West Hill. For starters, our oven was dropped and smashed by the gas man, the washing machine tore our clothes and the replacement flooded our kitchen on several occasions.
‘There was a five-month wait for mouldy wallpaper to be replaced, two broken dishwashers, a mouse and fly infestation and someone stealing our gas.
‘After a grand total of 243 complaint emails, we decided enough was enough and shifted to a, thankfully, much nicer place.’
But the reason many younger people are finding it more difficult to buy is because they are staying single for longer, according to Jonathan Rolande, co-founder of the National Association of Property Buyers.
He said: ‘House price vs. wage is no doubt stacked against younger buyers, compared to previous generations.
‘However, interest rates are a fraction of what they were for decades, so affordability is still there.
‘Also, many younger buyers are choosing to remain single for longer so don’t benefit from dual income mortgages as often as previous generations.’
Where a couple are looking to save for a deposit together the time it takes to save is understandably halved.
And often the ‘bank of mum and dad’ is necessary in order to put down money a deposit for a mortgage.
Dominik Lipnicki, director of Your Mortgage Decisions, said: ‘House prices have risen far faster than wages, this is further complicated by rents increasing above inflation, making it very difficult to save for deposits.
‘Around half of all first-time buyers use others to help them with the deposit, usually the bank of mum and dad. We also find that lenders are slow to move with the times, with restrictive lending criteria and tighter income multiples, meaning that it is often difficult to obtain a mortgage, even if the buyer has saved the deposit.
‘Unfortunately, governments have failed to build enough houses and until the supply versus demand issue is satisfied the future for young people looks tough as many of them on an average salary will never be in a position to purchase their home.’