1 in 3 Millennials Will Rent Forever
Up to 1 in 3 Millennials will rent forever, those born between 1980 and 1996, will never own their own home says new research from the Resolution Foundation. Escalating house price growth, rising cost of living and deposits. Contrasted with a backdrop of relatively stagnant wage inflation is creating a tough market for the so-called “generation rent”. Therefore, as the name suggests, it is highly probably many will fall into a lifelong journey of living in privately rented accommodation. Furthermore, researchers at Cambridge University, have stated that the trend of relying on the bank of Mum and Dad will increase.
Parents Providing Deposits
Research from Legal & General suggested that The bank of mum and dad provided deposits for more than 298,000 mortgages last year. £6.5bn was the total value lending estimated, according to insurer Legal and General. Therefore the total lending volume is now lending enough to their children to put them in the top 10 mortgage lenders in the UK.
The help received from parents is significant; as figures show that buyers can buy on average 2.6 years faster than without assistance. This is 4.6 years faster for first-time buyers in London. The Research from the Resolution Foundation; The think tank said 40% of “millennials” – those born between 1980 and 1996 – were living in rented housing by the age of 30. That was twice as many as “generation X” – those born between 1965 and 1980.
The rate of homeownership among young, middle-income adults in Britain has more than halved over the last 20 years, according to research that highlights growing generational wealth gap in Britain. Only 27 per cent of Britons aged between 25 and 34 with incomes in the middle bracket for their age owned a home in 2015/16, down from 65 per cent in 1995/96, the Institute for Fiscal Studies (IFS) think-tank said.
1.75 Million Renters, do not think they will ever be able to buy a home.
Approximately, 1.75 million people who rent their homes do not believe they will ever be able to buy. Which is an increase of 50% since 2010. Recent research from the official English Housing Survey by Labour shows the number of households renting privately that don’t expect to be able to buy in the future has increased by 585,000 since the Conservatives came to power.
The figures show that 1.75 million private renters said in 2016-17 that they did not think they would be able to buy their own home in the future. Which is up from 1.16 million in 2009-10. The number is up by almost 300,000 since 2012 when the then chancellor, George Osborne, introduced the help-to-buy programme, which critics claim boosted demand
Generation Rent Trapped In Rental Market
The Foundation’s Home Improvements report said “generation rent” needed much more help. The private rented sector is “far less fit for purpose” for families; as there is less security, and tenants often have to move when a landlord decides to sell. Furthermore, in today’s market, where many landlords have built up substantial equity due to market growth; many looking to sell to realise a profit. The report reveals that a record 1.8 million families with children renting privately, up from 600,000 15 years ago.
Home ownership is important, to own the asset and no longer have the monthly expense of a mortgage or rent. This is especially significant in retirement. Many homeowners intend to pass down their assets to their children. However, a housing shortage & increased competition, the dream of home-ownership is becoming more unattainable. Therefore, long-term private rented accommodation is the alternative.
The decline of Home Ownership Leading to 1 in 3 Millennials Will Rent Forever
The market share of owner-occupiers has remained relatively stable at 62%. However, social housing stock has declined; Private rented accommodation has filled the void. Affordable social housing; properties, owned by local councils or housing authorities and rented out below market rent are heavily stretched. This is because many of these properties have been sold off under the right-to-buy scheme. Which was a drive to increase home ownership. However, these properties were not replaced adequately. What’s more, there is a growing demand for social housing.