Stamp duty is 'money to pay for stamps' and mortgages are 'unlimited': a Halifax survey of future first-time buyers has interesting findings.

What’s the latest?

The next generation of homebuyers are in for a shock, as many expect to snap up their first property for just £50,000.

Research from Halifax has highlighted a raft of misconceptions among young people, with one in five 11- to 14-year-olds assuming they will be able to borrow unlimited amounts to buy a home.

A survey of over 1,000 people aged between 11 and 21 revealed they had little idea of how much a house cost, or how long it would take them to save for a deposit. Many expected their parents or the Government to help them on to the property ladder.

Russell Galley, managing director of Halifax, said: “Despite being one of the most important financial decisions we’re ever likely to make, becoming a homeowner feels like a mystery for Generation Z who will soon be thinking about flying the nest.

What do they expect?

A third of children aged 11 to 14 are banking on their parents giving them the cash they need to buy their first home, while an optimistic 21% of 18- to 21-year-olds think the Government will help them on to the housing ladder.

One fifth of young people also vastly underestimate the cost of becoming a homeowner, as they expect to be able to purchase a home in London for just £50,000 to £200,000.

But, in reality the typical first-time buyer property in the capital costs £422,580.

A quarter of men in the 18 to 21 age bracket also think they will only need to save between £5,000 and £10,000 for a deposit – significantly short of the £32,321 actually put down by first-time buyers.

Despite underestimating the size of the deposit they would need, a quarter of those aged 15-17 expected it to take them 20 years to save for one.

Halifax table showing average price for a typical first-time buyer home, by region:

Any other confusion?

Stamp duty was a mystery, with 10% of 18- to 21-year-olds thinking the tax related to posting letters.

Unsurprisingly, members of Generation Z were most likely to turn to the internet to buy a property at 36%, while 33% would visit an estate agent, but 27% thought a bank would help them find a home.

There was considerable confusion about the home buying process itself, with one in six older teens expecting it to take a year to complete a purchase.

What about when they've bought a property?

Looking to the future, surprisingly, once they have their new home, 32% of young people rated meeting their neighbours as a higher priority than getting Wi-Fi installed.

They were also more likely to focus on buying a sofa than having a housewarming party.

But many were not anticipating the long haul of repaying their mortgage, with a fifth of 18- to 20-year-olds counting on receiving an inheritance to clear their loan.

Despite their lack of knowledge, nearly six out of 10 18- to 21-year-olds said they thought it was very important to own a home.

Galley said: "There's clearly a job for us all to help kids get a better idea of what's involved with taking the first step on to the property ladder."

Top 3 Takeaways

  • 10% of 18- to 21-year-olds think stamp duty relates to posting letters, according to a Halifax survey
  • Many expect to buy their first home for £50,000 and be able to borrow as much as they want to
  • Others are relying on the Government or parents to help them get on the property ladder

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