To those who have been following developments in the housing market of Newcastle and beyond, it may come as no surprise that getting on the property ladder remains the most important spending priority for people across all age, income and gender groupings. Among old and young, and male and female, purchasing a home to call their own is a priority that far outstrips other spending goals such as going on a luxury holiday or paying off debts.
Millennials in the UK, in particular, prioritize getting on the property ladder at higher rates than just about any other age group. Given that real estate agent Knight Frank forecasts house prices in the North East to grow by a whopping 14% over the next four years, it seems increasingly unlikely that cash-strapped millennials will be able to achieve their dreams on their own, at least not without a hefty million-pound windfall.
Let’s take a look at the numbers to explore how and why housing remains at the forefront of people’s spending priorities across the UK.
How Would You Spend a Million?
IMAGE SOURCE: betway.com
This revealing information on the UK population’s spending priorities comes from research conducted by the online casino giant Betway, which asked thousands of respondents what they would do if they suddenly came into a £1 million windfall, perhaps from a lucky game of roulette. Across all of the different demographics surveyed, buying a home came out on top as the number one priority, with an average of 43% of respondents saying that this would be the first thing they would do.
This revelation is made all the more intriguing when compared to respondents from other countries, such as the United States, who listed “paying off debts” as their first and foremost priority. This is perhaps not surprising when examining the trillions of dollars in healthcare, mortgage, and credit card related debt owed by Americans, which exists on a scale that eclipses the UK. Just as in the US, this research reveals a lot about the mentality and lifestyle of consumers in the UK.
While a fair amount of British respondents also listed new cars and luxury holidays as an immediate spending priority if they won a £1 million jackpot, these responses are vastly outstripped by the importance of housing. Among Millennials in the UK, this is even more pronounced, with people under the age of 44 being the most likely to place home ownership at the top of their bucket list.
It’s likely that the appeal of this dream has been strengthened in recent years by the UK’s (and the North East’s) white-hot property market, which has seen home values skyrocket to the point that ownership is beginning to feel out of reach to many young people. The government has indeed responded to this crisis by slashing stamp duty and funnelling cash into a number of admirable social housing schemes across the North East but, with home value projected to continue rising rapidly, more and more young people are likely to feel that the only way to own a home is to win a million or so.
The North East Property Market
IMAGE SOURCE: pexels.com
Despite all of this, the North East is still the region in the UK where you’re least likely to need a 7-figure windfall in order to get the keys to your own home. Housing prices are among the lowest in the entire country and remain a fraction of what you’d have to pay in London or the South East for a home. Rental payments are also among the lowest in the country, with a spacious, comfortable flat in the city centre often costing less to rent than a tiny room in a houseshare on the outskirts of London would cost.
Regional disparities in the housing market are nothing new, but it does seem that the North East is catching up, for better or for worse. There have always been some very luxurious real estate offerings for those who do manage to get their hands on millions, such as this £2.8 million mansion in Morpeth, but it is generally known that housing in the North East is synonymous with affordability.
While house price growth in the North East is projected to be on par with other regions across the country, including London, it is unclear whether average earners will be able to afford these inflated prices. The economy of the North East has rebounded after the financial crisis and has also been helped along by events such as the recent Festival of the North. With this rebound has come more jobs and higher wages across many areas of the North East, which has, in turn, spurred on the prices of homes.
Your average house in the North East now costs around £130,000 according to the UK HPI, which may not seem like much compared to the £484,000 average for London, but the growth is significant. Over 2018, house prices in the North East have risen by an astonishing 4.2% per month, far outstripping growth elsewhere in England. It seems that the North East property market is finally making up lost ground and, while homeowners will no doubt be pleased by this, those who haven’t managed to get a foot up on the property ladder will likely find this information disheartening.
Home ownership is a cornerstone of British culture, something that people of all classes have aspired to since the start of the 20th century – whether everyone in the UK has the same potential to realise that dream is another matter entirely.