Younger people in the UK not in a rush to buy a property, research suggests
|Friday, 06 September 2013|
The research also shows that 52% of adults aged 35 and under now live in a home they don't own and the average tenant pays out around 40% of their monthly income on rent alone.
On top of this the majority, some 65% of renters have no safety net to cover the rent if they were unable to work, the survey by from protection specialist LV= found.
The number of households in England that are privately rented rose from 2.4 million in 2005 to 3.8 million in 2011/2012, a 58% increase and the research suggests that this trend is likely to continue as the younger generation's attitude to renting is changing.
The 42% of renters aged between 20 and 35 who are completely happy to rent claim that it's not important to them whether they ever end up owning their own place which indicates that a shift in attitudes to renting is taking place.
Whereas nearly all of the previous generation of Brits polled, those now aged between 55 and 75, had very different attitudes with 93% saying that owning their own property is the ultimate goal, yet only 33% of people under 35 now feel the same way. In line with this, 43% of all renters no longer see bricks and mortar as a sign of success, and 70% say the notion that it's in some way shameful to never own a property is completely out of date.
This more relaxed approach to owning property might be considered refreshing but it comes with a number of hidden perils including little leeway for renters should they not be able to pay for their accommodation and a lack of renters taking out income protection insurance. This is particularly striking when you consider that the cost of renting remains with the average renter paying out 39% of their income on rent alone. That's around £947 per month, and rises to £1,152 in the South East where rents are highest and account for 44% of a person's monthly income.
‘It's important to realise that renting does come with certain pitfalls that often aren't signposted. When buying a property you are encouraged to take out an insurance policy to guarantee repayments in the event that something happens to the mortgage payer, no such prompt exists in the rental market,’ said Mark Jones, LV= head of protection.
‘We know that one third of Brits currently rent and that 65% of these people have no insurance in place. This would leave a huge number of people in the UK in a vulnerable position if they found themselves unable to cover their rent and living expenses,’ he explained.
Indeed, far from being students or first job flat sharers, the majority, 72%, of 20 to 35 year olds renting are either married or in a relationship and earning an average of £34,084 a year.
Reasons for renting are varied. Some 17% of young Brits rent because they don't want to be tied down to any one place, 13% would rather get a feel for their area and their neighbours before making a decision, one in 10 simply have no inclination to buy, and 7% would rather spend their money on other things than putting it into property.
In addition, the nations' tenants are clearly unmoved by the government's recent Help to Buy scheme with 79% of 20 to 35 year olds polled saying this latest initiative hasn't motivated them to put a foot onto the property ladder.
Young people seem to be more realistic about when they will be able to afford to buy a property. The previous generation said at the age of 25 they expected to be able to afford to buy but younger people now say not before the age of at least 36.