Lack of education damaging for first-time buyers
There has been a lot of talk over the past 12 months concerning first-time buyers and their struggle to get on the property ladder despite the introduction of various government schemes and incentives.
The twin evils of rising property prices and a shortage of appropriate housing have been taking the brunt of the blame, however I think a far deeper issue exists.
I believe that many first-time buyers lack the appropriate knowledge with regard to purchasing a property. Scores upon scores don’t fully understand what a mortgage is, how they work, and how previous financial activity can impact their chances of successfully obtaining one.
One of my biggest frustrations is that finance, money, and various ‘real life’ skills are not an embedded part of the school curriculum. I find it amazing that a child can emerge from their education with the ability to quote entire passages of Shakespeare, yet will have no idea what a direct debit is for, what credit history means, or how a mortgage actually works.
Fast forward 10 years and these same people are looking to buy a home for the first time, but are being stung after realising that arguing with their mobile phone provider over a £5 charge a year ago and getting a default for their trouble was, perhaps, not the wisest move.
I have seen, and continue to see, far too many people who have worked extremely hard to save up for a deposit for their first place only to be knocked back for a mortgage because of a past scenario that, I am sure, would have been handled much differently had they been aware of the potential long-term consequences.
We have experienced a massive boom in credit expenditure over the past few decades, and while it is obvious to most that the world of finance has changed, many still seem to retain the ‘it is the job of parents to teach children about money’ mindset.
Now, this is all well and good if the parent has a sound knowledge of money and has the ability to offer a rounded and comprehensive financial education, but more often than not this is not the case.
While I appreciate that values and attitude cannot necessarily be taught, there is certainly scope for schools to do more. If we drew a line in the sand now and agreed that every child will have a basic knowledge of financial products by the time they leave education, then surely future generations can only benefit.
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