It’s no secret that the younger generation in Northampton is finding it tough to get onto the property ladder. With the rising cost of living, stagnating wages, and stricter mortgage criteria, it's no surprise that fewer under-34s are becoming homeowners.
But just how
grim is the picture? And is there hope on the horizon for those struggling to
find a place they can truly call home?
Northampton's Housing Crisis: The Struggles of the Under-34s
According to statistics for the West Northamptonshire Council area, there are 172,643 households in total.
Of these, 2.4% are headed by individuals aged between 16 and 24, while 13.8% are headed by individuals aged between 25 and 34.
Comparing with 2.6% of all UK households that are made up of people aged between 16 and 24 and 13.5% of all UK households made up of people aged between 25 and 34.
Looking specifically at the 16 to 24-year-old households in West Northamptonshire, they can be broken down as follows …
·
Owned
Outright – 3.0%
·
Owned
with a Mortgage – 13.9%
·
Social
Housing – 24.6%
· Private Rented – 58.4%
Nationally, this compares as owned outright 3.6%, owned
with a mortgage 10.2%, social housing 22.8% and private renting 63.5%.
Next, the 25 to 34-year-old households in West Northamptonshire breakdown…
·
Owned
Outright – 3.1%
·
Owned
with a Mortgage – 41.6%
·
Social
Housing – 16.5%
·
Private
Rented – 38.8%
Nationally, this compares owned outright 4.1%, owned with a mortgage 35.5%, social housing 17.7% and private renting 42.7%.
For a town like Northampton and local authority area, these numbers paint a rather bleak picture of property ownership among the younger generation.
But why is this happening? The answer is multifaceted. It’s not just about rising house prices (although they certainly play a role). Wages in Northampton have not kept pace with inflation, and with lenders becoming more conservative, the amount of deposit required to secure a mortgage is higher than ever before (not because the % of deposit is higher, just the sheer pound note amount).
For young
people who are already grappling with student debt and rising rental costs,
saving for a deposit can seem like an insurmountable task.
The Shifting Sands of Homeownership
Yet, while it might feel like homeownership for the under-34s in Northampton is slipping further out of reach, it’s worth putting these figures into context. Homeownership isn’t something that young people have ever done en masse, at least not in the recent decades of the 2000s and 2010s.
While the baby boomer generation often bought homes in their early to mid-20s (in the 1970s and 1980s), the dynamics of homeownership have changed dramatically since then.
The average age of first times buyers in the 1980s was 26, now the average age is 31 years (34 in London).
In the 1980s, when the housing market was more accessible, people were more likely to buy a home at a younger age. However, times have changed, and today's generation is navigating a very different set of economic and social circumstances. The cost of housing has skyrocketed, while wages have not kept pace. Furthermore, younger people today are often burdened with additional expenses that weren’t as prevalent a few decades ago, such as student loans and rising living costs. This combination makes it much harder to save for a deposit and secure a mortgage.
But while the statistics may seem gloomy, there’s a silver lining if we look beyond the current market and consider the long term. In countries like Germany, homeownership doesn’t typically happen until later in life. Germans tend to rent for longer, often well into their 30s and 40s, before purchasing a home. Yet, when they do finally buy, they have more financial stability, higher incomes, and can often make larger down payments. The result? Less debt and more security in the long run.
This delayed
homeownership is becoming more common in the UK, and Northampton is no
exception. What we may be seeing is not a permanent decline in young homeowners
but a shift in the timing of when people buy. Instead of purchasing homes in
their 20s, more people are waiting until their mid 30s or even 40s, when they
have a bit more financial stability.
The Hidden £23,721,929,704 West Northamptonshire Equity
One key
factor that we cannot ignore is the £23.7bn of equity tied up in the homes of
the 50 year plus older generation in West Northamptonshire.
Many of our older residents, who bought homes decades ago when property prices were more affordable, are now sitting on this substantial equity. As these homeowners begin to downsize or pass their properties onto their children, we may see a significant transfer of wealth to the younger generation. This could provide a lifeline for many would-be homeowners who are currently priced out of the market.
In Northampton,
where family connections are strong, and homeownership is often passed down
through generations, this transfer of wealth is likely to have a profound
impact on the housing market in the coming years. As baby boomers and older Gen
X-ers look to pass on their properties, many younger people may find themselves
with the financial means to finally purchase a home.
What Does This Mean for the Future of Northampton Homeownership?
The future of homeownership in Northampton isn’t all doom and gloom. Yes, the statistics show that fewer young people are owning homes, but this isn’t a permanent trend. The numbers may be low now, but there are several reasons to be optimistic about the future.
Firstly, as more young people start to prioritise saving and look for ways to get onto the property ladder, we could see an increase in homeownership rates among the under-34s. Previous schemes, such as Help to Buy and shared ownership can also provide much-needed assistance for first-time buyers in Northampton.
Secondly, as the older generation begins to pass on their wealth and property, younger people will likely have more opportunities to purchase homes, either through inheritance or through financial gifts. This generational shift will undoubtedly play a significant role in the future of Northampton’s property market.
While homeownership might not be happening as early as it did in previous decades, it is still very much attainable for those who are willing to plan and save strategically.
There’s no denying that the market is tough, but with the right guidance and support, many young people in Northampton will find that they can, in fact, become homeowners.
The key is to be patient, stay informed, and seek out opportunities as they arise.
As we look towards the future, it’s clear that the property market in Northampton is changing. Young people may not be buying homes as early as they did in the past, but that doesn’t mean they never will.
In fact, the
next few decades could see a rise in homeownership as wealth transfers down
through generations and more young people become financially stable.
In
conclusion, the Northampton property market may be challenging for those under
34, but it is far from hopeless. The combination of shifting generational
wealth and changing attitudes towards homeownership means that while young
people may be delayed in buying homes, they aren’t being locked out of the
market entirely.
Northampton’s future homeowners are out there – they’re just waiting a little longer to step onto the ladder.
