10th November 2020

The rising cost of house prices

Jumping on the property ladder is unfortunately getting harder for many, and first time buyers AKA millennials are widely known as ‘Generation Rent’ for this reason. It’s not hard to see why, without any financial support, they sadly are left out in the cold when it comes to purchasing their first ever home. As a parent looking ahead, this is where a Junior ISA can help with the planning of your child’s future, and potentially assist with the funds for their first home when the time comes.

A recent survey by Halifax bank has noted that property prices in the UK have increased by 69% in the past decade. Yes, you read that correctly, a 69% increase on properties throughout the UK. This is a much larger increase than that of the UK national wage, meaning home ownership is sadly becoming more and more unlikely for thousands of first-time buyers. The average UK house price is now at £241,025, which is a steep increase to the average of £142,473 which was the average price in 2010. 

Recently, we’ve seen an increase in those buying and selling their properties at a profit, due to many looking to upscale or switch up their home environment. As a result of this, banks are increasing their loan to value mortgages, which unfortunately is due to affect ‘generation rent’ plus younger generations ‘Z’ and ‘Alpha’ more and more. 

However, it’s not all doom and gloom, with the future financial milestones of your children in mind, it is important for those considering a Junior ISA to understand the clear picture and financial constraints your child may come across. With a Junior ISA you can get ahead of the game, you can see your small savings grow to bigger, future possibilities, perhaps a downpayment of a home or help with their future mortgages. 

A Junior ISA is an investment into your child’s future, and inevitably buying property may be one of their goals. For parents and guardians looking to save a Junior ISA is a popular choice, due to their tax-free savings allowance. For the year 2020/21, you and family members can contribute up to £9000 to save towards your child’s future. Not only does this help with future planning, it also eases your mind, allowing you to know your child will have a financial safety net as they step into adulthood.

A huge plus of saving with a Junior ISA is that any capital gains made on the savings is not taxable. This means for a child born today, if their parents could save £100 a month for 18 years, with a projected 5% growth per annum, they could save over £34,000 for when their child turns 18. This sum of money could go a long way to helping them buy their first home, breaking the difficult cycle many young adults are facing today. 
Visit here to explore our range of Junior ISAs and potential savings opportunities for your child’s potential future home.

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