Nearly half of young people in rented accommodation feel they will never be able to afford their own home, but is their pessimism justified?
With owner occupation at historically low rates, young people seem justified in their gloomy outlook, especially those living in London and the North East: the worst areas for owner occupation in the country. The housing crisis in the UK only seems set to deepen.
Since 2005 the number of private renting households in the UK has doubled, perhaps due to a large rise in the average house price, some figures suggest around £75,000 mean increase
There has been a fall in social renting and rise in private renting
Young people aged between 16 and 34 have historically been less likely to own their own home than over 65s but during the past 20 years the gap has grown dramatically. Home ownership among the younger age range fell from 54% to 34% while the same time period saw a growth from 63% to 77% among the older age group.
According to government reports, even those who are homeowners will not be able to avoid the negative impacts of the housing crisis. If the current low levels of home ownership continue the UK taxpayer will be looking at a financing a 50% increase in housing benefits over the next twenty years. This will be to support an aging population living in rented accommodation.
What’s the solution?
It is not all doom and gloom though. For example, the government’s help to buy ISA scheme, which was launched in December 2015 and will be open to new savers until November 30th of 2019, has paid out an average of £920 over 300,000 times, providing a much appreciated lifeline to first time buyers.
There are opportunities to get on the property ladder for the canny, and people would do well to seek professional advice so that they can make plans for their future.
Petty Real is a multi-award-winning estate agent with a long tradition of getting people onto the property ladder, and they offer free mortgage advice (you can register here) to anyone wanting to find out more.