Only stocks and shares are seen as being more expensive than a first home, researchers discovered, despite numerous current schemes to help first time buyers, such as the Government’s Funding for Lending programme.
Researchers asked 20-29-year-olds what minimum salary they would need before they could contribute to life’s key expenses.
The most attainable financial investment was a car – with the average twentysomething saying they would need to earn £23,290 a year before they could put money aside.
This was followed by a wedding (£25,266), a pension (£25,769), life insurance (£29,360), financial advice (£32,460), and healthcare (£32,474).
Only when they were earning £33,729 – around a third more than the national average salary of £26,100 – did respondents say they would feel able to start putting money towards a mortgage.
The least achievable of the spending milestones was investment in stocks and shares (£34,942).
MRM director Michael Taggart said: “We are seeing a seismic cultural shift with swathes of young adults giving up on owning a home any time in the near future.
“A combination of historically high house prices and lack of availability of mortgages has simply moved homeownership off the agenda.”
Iona Bain, who sat on an expert panel for the Young Money report, said: “The results of this survey could cause some sleepless nights in the financial industry – it shows many young adults believe they need a steady wage well above the national average to afford property, financial advice, life insurance and investments.
“We could be looking at a diminishing customer base for many providers unless they do more to engender trust, change perceptions of how much their services cost and prove what their long-term benefits are.”
Which? Money deputy editor Gareth Shaw, who also sat on the panel, added: “It’s surprising to see that twentysomethings are considering life insurance at such a young age, even before they consider buying a home, and highlights a lack of understanding about how to prioritise protection needs.
“Depending on the terms of their employment, income protection would be a far more important product to own than life insurance – you’re unlikely to have dependents to leave a payout for, but almost certainly have rent and bills that need paying.”
