LONDON — UK millennials are behind the global trend when it comes to buying a home, and are less than half as likely as their counterparts in China to own their home.
According to an HSBC study, 70% of Chinese millennials have bought a property and more than 90% of those that haven’t yet plan to buy one within the next five years.
Meanwhile, in the UK, just 31% of young people surveyed by HSBC said they had bought a home.
Of those that haven’t, 74% said they intend to do so within five years, the lowest of all the countries surveyed.
The UK came under the global averages of 40% and 83%.
UK millennials have suffered from rapidly increasing house prices and stagnating wages. Britain had the second largest gap between house price growth and wage growth of the countries surveyed. House prices are growing at 7.5% while wages are increasing at a rate of just 1.8%.
In China, house prices increased 3.6%, while salaries are likely to rise 4% in 2017, according to HSBC’s figures.
Here’s the HSBC chart:
Around two-thirds of millennials surveyed who don’t own a home said they need a higher salary to be able to buy.
“The greatest challenges are in those countries where there is a perfect storm of stagnating salaries and rising house prices — for millennials in those countries, the dream, while not dead, looks set to be deferred,” Louisa Cheang, HSBC’s global head of retail banking, said.
In the UK, around a third of first-time-buyers relied on family loans or gifts from the so-called Bank of Mum and Dad in 2014, up from 20% just four years earlier, according to a report from the Social Mobility Commission earlier this year. This is projected to hit 40% by 2019, the report said.
But young people across the world face the same problem, and the UK is around average.
Here’s the HSBC chart:
UK property is also sought after as an investment for overseas buyers, which has helped to keep prices higher.
According to a report in The Times, more than 93% of flats in a large housing development in Manchester have been bought by overseas residents. The buyers came from 18 countries and more than 130 of the properties were bought by “two secretive companies based in the British Virgin Islands,” The Times said.
The government proposed rules on Thursday requiring foreign companies that buy property in the UK to disclose who owns them as part of a plan to curb money laundering and tax evasion.
The Department for Business, Energy and Industrial Strategy published a paper seeking views on the property register from real estate agents, lawyers and civil rights campaigners.
According to government figures, foreign companies own about 100,000 properties in England and Wales and with more than 44,000 in London. Public sector corruption siphons $US1.5 trillion to $US2 trillion annually from the global economy in bribes and costs far more in stunted economic growth, lost tax revenues and sustained poverty, the International Monetary Fund said last year.
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