Generation rent - a generation of young people who are forced to rent because getting a foot on t...
Generation rent – a generation of young people who are forced to rent because getting a foot on the property ladder is becoming increasingly more difficult. PWC has predicted that, within a decade, more than half of 20-39 year olds will be in rented accommodation. House prices are expected to grow up to 17% over the next five years. Not only is the growing rate of house prices an obstacle for this generation but so is the increasing costs of rents. It is predicted that renters spend over half their salary on rent making it near impossible to save enough for a deposit. The house share website, SpareRoom.co.uk, found that it is not just young people that have been affected, but also those of an older generation. Alarmingly, between 2009 and 2014, the number of flat sharers aged 35-44 rose by 186%, and it soared 300% for those aged 45-54. These are frightening statistics. Research from the Council of Mortgage Lenders has suggested that of those born in 1970, 71% were homeowners by the time they were 40. For those born in 1990, this statistic sits at 47%.
So what does this mean for you? Well if you’re a landlord then it’s a good thing – business is booming. If you’re thinking about investing in property then this would also be the time to do it. The stats make it clear that it is highly unlikely that there will be a sudden exodus of generation renters onto the housing ladder, unless David Cameron’s prices for his new builds are lowered that is and he builds more. Maybe that could solve this? This is also unlikely though, so landlords and potential property investors, you’re fairly safe. You should also be thanking the stars that you have safely secured a place on the prestigious property ladder and are not stuck in a rut where your attempts to save for a deposit are thwarted by rising house prices that outpace earnings growth.
These rises in house prices are not just exclusive to the mainland either. Although there has not been such a dramatic increase in Northern Ireland house prices as there has been in the rest of Great Britain, we have still seen a 8.8% increase since last year. The average house price now sits at £151,000 – the lowest of all the UK regions but still unaffordable to many. Danske bank reports that house prices are expected to rise at an average of 3.5% per year from now.
One thing is for sure – the future is looking bleak for Generation Rent.
If you’re interested in selling or investing in property, give us a call on 028 9022 8409, where our sales agent, Yasmin, would be more than happy to talk things over with you.