Millennials perhaps face some of the greatest hurdles to homeownership at this time, but they are also the next big homebuyer segment. This blog offers a snippet of the insights included in Reapit’s newly released report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.
What do they value most?
Millennials are a mercurial group, valuing freedom and flexibility. In many regards, the values and attitudes of this demographic have been shaped by the 2008 Financial Crisis and its impact on employability and finance, with saving opportunities greatly affected and ‘live in the moment’ spending habits that are very much experience-driven becoming the favoured mindset.
This also extends to how they approach homeownership. A report from the Resolution Foundation thinktank suggests that one in three of Britain’s Millennial generation will never own their own home, with many stuck in long-term renting. Hamptons International data revealed that Millennials were responsible for 60% of all rent in 2019, which makes sense given that they are the second-largest demographic group in the UK after the Baby Boomers (who are more likely to be pre-existing property owners).
According to a report from Deloitte exploring how the priorities and aspirations of Millennials and Gen Zers have evolved, 49% of Millennials wish to buy homes of their own, compared to 52% of Gen Z surveyed. Yet they tend to not be as financially judicious and astute as the Gen Zers, making it more likely that owning their own homes could well be further along the horizon.
How has their behaviour changed when buying a product or service?
Much like Gen Z, web services form a key part of Millennial behaviour when buying a product or service, with 68% of Millennials demanding the convenience of omnichannel accessibility that enables an integrated experience where they can effortlessly transition their consumer data between their smartphone, to laptop, to local store, and back again.
Millennials have also become increasingly concerned over recent years with how environmentally friendly the products and services they choose to engage with claim to be. Environmental concerns among this demographic have particularly accelerated under COVID-19, with a PwC survey finding that 58% of core Millennials (ages 27–32) were claiming that they had become more eco-friendly than they were before the pandemic.
When it comes to buying a property, affordability remains a key issue among this demographic – data from a Financial Times survey found that nearly half of respondents have had to delay buying a home, with 23% feeling financially insecure or very insecure.
However, the challenges of COVID-19 have certainly influenced Millennial priorities when it comes to homeownership and the associated stability it offers – according to research from Dynata, the pandemic has inspired 13% of Millennials to buy a home for the first time. A further upside of the pandemic is that it acted as a wake-up call for younger generations with Millennials saving more than any other group during the height of the pandemic, increasing their savings by more than 30% in 2020, according to research from Aldermore Bank.
How Millennials approach a property purchase
Millennials are the next big homebuyer segment, as many are now reaching the stage where they have saved up a sufficient deposit to get a foot on the ladder – but for many it’s a slow process. Research from ABC Finance shows that it takes on average 8 years and 4 months for a single Millennial first-time buyer to save a deposit, and this rises to 15 years and 11 months for buyers in London.
The ‘Generation Rent’ demographic still relies heavily on the Bank of Mum and Dad to secure a deposit. Data from Legal & General reveal that 56% of first-time buyers aged under 35 received financial support from their parents to get on the ladder, and 71% of these new homeowners claimed that without financial support from their family, they would have to delay their housing plans by four years on average.
Interested in more insights on how consumers have changed? Download your free copy of Reapit’s report on the Consumer (R)evolution: how to attract, engage and retain the 2021 consumer.