New research suggests that a growing number of British renters are sceptical about the chances of ever owning their own home.
Bleak
According to the survey of more than 10,000 users by flat and house share site SpareRoom.co.uk, 18% of renters believe that they will never be in a position to own their own home. This shows a rise from 12% in SpareRoom’s 2011 census, indicating that more people feel owning their own place is unlikely.[1]
A bleaker outlook seems present for people in their 40’s renting a property. 49% of people questioned in this age bracket said that they never expect to own their own place, having been priced out of the market. This is concerning, considering that people in this age bracket earn on average 17% more than the U.K average wage. It can be suggested that figures gauged from people of this age paint a more accurate picture of future home-ownership percentages, with them being at their maximum earning potential.[1]
Taking into account all-age groups questioned in the survey, 49% answered that it would be five-ten years before they would be in a position to consider entering the market. 23% said that they would need at least a decade.[1]
UK divide
The figures indicate that 49% of renters spend between 30-50% of their income on rent, with 23% spending in excess of 50%.[1]
A quarter of Londoners suggest that it will be at least ten years before they can get onto the property ladder, with escalating house prices and rising rent making it harder for them to save. In addition, in one four renting Londoners said that they paid more than 50% of their income on rent. That figure was almost matched by Scots (23%) with renters in the East Midlands (14%) least likely to spend that much of their income on rental payments.[1]
Londoners (37%) are also most likely to suggest that their rent is unaffordable, with renters in Yorkshire and Humberside (15%) least likely to complain. [1]
Slipping away
Average rents in London have risen to £691 per calendar month, with an average of 39% of Londoners’ take-home pay being spent on rent.[1]
Director of SpareRoom.co.uk Matt Hutchinson said that the findings of their report pointed to a bleak future for would-be homeowners. Mr Hutchinson said, ‘for nearly one in five of Britain’s ever-growing population of renters, aspirations of home ownership are slipping away.’[1]
He went on to say that, ‘price rises seem to be unstoppable,’ and that, ‘prices for first-time buyers are rising faster than prices for owner-occupiers.’ Hutchinson believes that this, ‘coupled with rising rents eroding savings,’ means that it is, ‘hardly surprising that such a significant proportion of renters have resigned themselves to never owning their homes.’[1]
Hutchinson also issued a stark warning for the future of the property market, saying, ‘the reality is that many young professionals will never own their homes. Attitudes to renting for life will have to change as, like it or not, we are heading towards a European approach towards property, where so called ‘lifestyle tenants’ are the norm. Given the British love-affair with property ownership, this is going to be a major cultural change.’[1]
[1] http://www.landlordtoday.co.uk/news_features/Home-ownership-slips-further-out-of-reach-for-UK-renters