How will AI shape Gen Alpha’s journey to homeownership?
Traditionally, homeownership has been one of the most significant financial milestones people achieve in adulthood. But with the rise of artificial intelligence, Gen Alpha’s career trajectory and resulting journey to reach this goal may be quite different to previous generations. In this blog, we’re exploring how the evolution to an AI-driven economy may affect job opportunities and subsequently impact their ability to save for a deposit and secure a mortgage as a first time buyer.
AI and the changing job market
In January 2024, the World Economic Forum reported that 60% of jobs in advanced economies, such as the UK, will be affected by machine learning. Approximately half will bear a negative impact via lower salaries and reduced hiring, with some roles becoming obsolete altogether.
However, new industries will likely arise and create high-demand jobs in fields such as science, technology and sustainability. In fact, the research centre McCrindle predicts that 65% of Gen Alpha will work in jobs that don’t yet exist. How AI will affect the exact career opportunities available to this generation remains to be seen. But it’s widely accepted that there will always be a need for the human touch. After all, it takes human intelligence to create and develop artificial intelligence.
Just as millennials grew up with the advent of the internet and Gen Z with the proliferation of smartphones and social media, growing up in the AI era puts Gen Alpha at an advantage. Like the two generations before them, they’ll be innately tech-savvy, adapting to the rapid changes this budding technology brings and reaping the resulting benefits.
Financial planning for Gen Alpha
We’ve looked at current property prices and market trends to project what salary Gen Alpha may need to earn to afford to buy a home.
As of July 2024, the average house price is £290,000, with prices expected to rise 2.5% this year. Typically, mortgage lenders offer up to 4.5 times an individual’s salary, meaning the average home-buyer would need to earn upwards of £64,000. If trends continue in this direction, property prices could rise by 15-20% over the next decade, when members of this demographic will be old enough to enter the housing market. Therefore, if the average property price rises to £348,000, by the time this generation is house-hunting, they would need a salary of approximately £77,000 to secure a mortgage.
Tips for first time home buyers in an AI-driven economy
AI is constantly learning, contributing to its rapid evolution. While this makes it challenging to predict the specific outcome on the job market and financial landscape for Gen Alpha, home buyer advice from the current cohort of property purchasers includes practical tips future first time homeowners can benefit from.
Financial literacy should be a key priority, as understanding budgeting, credit, interest rates and mortgages will set them up for success when buying their first home. Long-term financial planning, such as saving from early on, could give them a head start by helping them build wealth over time. It could also protect them from potential instability in the job market by providing a financial safety net.
At Share to Buy, we make your choice easier with a selection of new-build homes across England, available through alternative homeownership schemes such as Shared Ownership. Get your home-buying journey underway using our property portal.
