The voice of Galicia
Writing / The Voice
27/12/2020 15:42 h
–
–
–
When a young person pays more a month in rent for an apartment than he would pay on a mortgage, it means that things are not going well in the housing market. It is a scenario that is repeated more and more frequently in Spain. And what is worse: the rent is hijacking the saving capacity of the youngest. At least 50% of them are not able to save to meet the payment of an entry, according to the AEDAS Homes report on Young People and Housing 2020.
There is 20% of the initial cost of the house that the bank does not finance. They are 34,194 euros on average, according to the figures managed by the Government through the Ministry of Transport, Mobility and Urban Agenda. It is a fortune when compared to what young people who want to acquire a residence have managed to save on average (12,758 euros). They only have 37% of the money needed to pay for the ticket. This low capacity to save is the main obstacle to signing a mortgage because, according to experts, many of them can afford the monthly payments of the mortgage, even more easily than the rent.
Is the rent the only problem? No. 18.1% of young people claim that they do not have enough economic or job stability to get into a mortgage. 16% prefer not to take the step due to economic uncertainty. 10.5% have postponed the purchase for several months waiting for prices to fall and 9% are not even clear about what type of home or in which area they want it.
Who wants to buy a flat or a house, but who can. According to the report, saving problems among young people depend, obviously, on their status and way of life. Those who reside for rent with their partners have 15,901 euros in their piggy bank on average. Those who still live with their parents have only been able to save 9,848 euros, slightly more than those who share a flat with friends (9,199 euros) or those who live alone for rent, the most penalized (8,825 euros). And it is that if they choose to become independent sooner, they have more difficulties to be able to save. Rent takes a good part of your rent.
Of course someturn to their families (40.3%)to pay the entrance. Of those who have had the support of someone close to them, 16.8% say that they will only be able to collect 10,000 euros, still insufficient to pay the initial bill. 15.6% believe that they could give them between 10,000 and 30,000 euros. Only 7.9% assure that the family could lend them more than 30,000. What about the almost 60% of young people who cannot count on family help? Well, they can’t buy a home.
Solutions
Young people who want to buy a home have the ability to pay month by month, but not savings, since they have to allocate a large part of their income to rental income, he points out. Jorge Valero, Director of Data and Digital Transformation of AEDAS Homes. Faced with this reality, he points out that a possible solution would go through the increase in the supply of rental housing. With more supply in the market, prices will relax and the saving capacity of young people will increase. As suggested by many real estate associations, another solution would be the creation of a alternative financing program in the form of a guarantee promoted by the Administration in which up to 15% of the entrance fee is paid for young people who want to buy their first home. In countries like the UK it has been quite successful.
