Paying off mortgages will take longer for younger generations

Getting on the property ladder is proving costly for many people, according to new research.

A study published by HSBC revealed that it will take the next generation much longer to pay off their mortgage than it did for their predecessors.

Its findings showed that the present generation of 25 to 36-year-olds face an uncertain future as their current circumstances have a significant effect on their future property purchases.

Those aged between 25 and 36 today who own property are likely to pay off their mortgage aged 60. On the other hand, the property "have nots" will still be paying off their mortgage at the age of 67 and a half.

The research also showed that those without adequate capital behind them, don’t expect to buy their first home before the age of 35.

However, those who are better off are likely to get their first foot on the ladder at the age of 29. This means it is taking the "property haves" just one year longer to get on the property ladder than it did 30 years ago.

On the other hand, the situation is very different for those who do not have adequate finances behind them.

Brits who are able to afford a property will be trading up and moving into their family home at 35, while those without funds are unlikely to be moving into their family home before the age of 42.

Commenting on the findings, Pete Dockar, head of mortgages at HSBC, said: "Home ownership continues to be an aspiration for the majority of young people. This study shows postponing their purchase has long term implications not just for their future property ownership, but their ability to help their own children step onto the ladder.

"Deposits remain an essential ingredient to getting a mortgage, but in comparison to previous generations affordability is still healthy, so first time buyers can feel confident about making their first step."

This means that many Brits are likely to stay in rental accommodation for longer as property purchases become increasingly more expensive.

Published 10th February, 2014

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