Under 40s face a lifetime of renting
By 2025 more than 50% of those aged under 40 will be living in properties owned by private landlords according to recent figures published by Price Waterhouse Coopers. Private renting will, increasingly, be the norm for 20-39 year olds. Further, the University of York’s centre for housing policy estimates that a third of 60 year olds will still be living in rented accommodation within 35 years.
As to the causes of this trend – there are a range of views from various commentators.
Some point to problems with affordability. This issue arises in a number of ways – much has been written in the press recently about the lack of affordable housing. This situation is compounded by the fact that house prices are continuing to increase indeed it’s been projected that the average home will cost £360,000 by 2020 so a deposit to buy the average home would be in excess of £64,000.
With such substantial sums being required for a deposit many people are making a later entry into home ownership and therefore spending longer and longer in rented accommodation. Whilst rented accommodation gives them flexibility to move if their job demands it, the rental outlay impedes their opportunity to save and so buying a property is postponed.
However other commentators disagree with the view that owner occupation will fall pointing to the sustained popularity of property purchase and the availability of government schemes such as Help to Buy.
Head of Property Lynne McCaffrey comments:
“Buying your first home is a goal that most young adults have, however recent economic and social changes have put that goal out of the reach of many first time buyers.
“On the other side of the coin the trends reported here point to increases in those planning to purchase buy to let property. And ironically the numbers of households who own their home outright is projected to increase from 8.4 million to 10.6 million in 2020.
“Of course we’ve yet to see whether these trends are borne out by reality – only time will tell.”
Content correct at time of publication