Tenants in London are facing a five-year delay in buying a property of their own should they leave savings in cash. This is a result of record-low interest rates, according to new research.
A surge in residential property prices over the last 20 years means that the amount required for a deposit has increased rapidly.
Deposit
With rent and other living costs on the rise, many are struggling to put money aside in order to save for a deposit. 41% are not expected to get onto the property ladder, according to the study from Bricklane.com.
Simon Headwood, Founder of Bricklane.com, noted: ‘Generation Rent is being doubly hit by rising house prices and low interest rates, meaning cash savings are not getting them any closer to the property ladder. With a big drop in home ownership among millennials and almost five million households in the UK calling their rented property home, now is the time for action.’
Generation Rent being impacted on by higher prices and lower interest rates
‘Young people work hard to put money aside for a deposit, but by saving into Cash ISAs they’re putting their chance of owning a home in even greater jeopardy. We need to get people participating in and benefitting from the residential property market so that everyone can make their savings work harder and get closer to owning a home,’ he added.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/generation-rent-hit-by-rising-house-prices-and-low-interest-rates