With home ownership fast becoming a distant dream for many young people entering the workplace, what I envisioned my life to be in my twenties is not what it turned out to be. Now at the age of 33, I find myself thinking of dishes, and how many I would need to wash in order to keep up with the rent on my in South London flat.
It was during my first year at the University of Westminster in 2010 when I got a temporary part time job in the kitchen of a private hospital. Part of the job description was to wash the dishes for the staff dining room. This is where dishwasher economics first hit me.
On a slow evening I actually I worked it out... 240,000 dishes per year! Gosh, I was working 24 hours a week for £7.50 per hour - at that rate it would take me over 26 years to save £25,000 for a deposit on a house.
I've sacrificed in order to study full time at university. It has been one of the hardest things to complete at this stage of my life. After the downturn of 2008, I was one of many who found themselves out of a job with restricted prospects. Returning to education was something I felt I had to do in order to eventually get on the property ladder and generally secure a better future for myself.
Official figures from 2012, show that the average first-time home in London costs a record £174,000, pricing many young people out of the market.
A YouGov poll commissioned for Shelter, revealed that the ideal age for young people to move out of their family home is 22. However, rising costs of home ownership and the lack of affordable housing means that many young people are doomed to never own their own home. The poll found that 59% of adults who don't own a home believe they will never be able to afford to buy in their local area. Seventy-two % of renters say they are only able to put aside £50 a month or less in savings, while 58% report being unable to save anything at all.Campbell Robb, Chief Executive of Shelter, said:
"With more young people and families priced out, home ownership levels are already starting to fall, which in turn is driving up the cost of renting. Unless something changes, the next generation will find it even tougher to find a stable and affordable home."
Last month, in the 2013 Budget, the new Help to Buy Scheme was pledged. Apparently, the government will provide buyers with an equity loan of up to 20% of the value of a new build property. The loan is interest free for the first five years. From year six a fee of 1.75% is payable on the equity loan, which rises annually by RPI inflation plus 1 %. The equity loan can be repaid at any time within 25 years (or the terms of the mortgage), or on sale of the property. Buyers will be able to access this scheme through participating house builders and HomeBuy agents.
On paper this seems to be beneficial for the position I am in, but, there are certain clauses which leads me to think that the traditional method of obtaining a mortgage would be better in the long term.
According to the website Which.co.uk, in order to get a good mortgage deal, a deposit of up to 25% of the home's value is needed - some of the best deals require 30% or even 40% deposits.
Most first time buyers will look to get a 90% 'loan to value' mortgage. This means that you are borrowing 90% of the value of the property you want to buy, and will need a deposit equivalent to 10% of the property's value. On a property valued at £200,000, this means you'll need a deposit of £20,000.
Ultimately, it seems that I have only two options- continue to rent or try to obtain two jobs after graduation to achieve my dream... One to pay the bills and one to save for the deposit...
Oh well, back to the dishes!