Landlords can rest assured that the number of renters is likely to increase in the coming years.
The next generation of aspirational homeowners are making the decision to not save up for a house, and are instead looking at long-term renting alternatives.
Since the onset of the recession, young adults coming out of university have not had the financial means to save up for deposits, and their income levels are still too low to guarantee mortgage repayments, which are set to rise with interest rates later this year.
So most people aged 20-45 (57%) are forgoing making savings for a house, and are instead looking at renting. This is also reflected in the fact that homeownership is at its lowest level in 29 years, especially among young people, and this number may continue to decrease in the coming years.
In figures released by Halifax it was discovered that non-homeowners felt they would never buy a home, with at least 71% of survey respondents claiming this (in the North West), and up to 82% (London) at most.
This isn’t necessarily a bad thing – but a positive reflection of the trend of wanting to rent. It is seen as a more secure option that removes many financial risks (namely mortgage repayments), but still allows ‘serious’ renters to live in a house they can essentially call their own. There is no reason to see this trend changing any time soon. Furthermore, the property bubble originating from London is starting to spread around the country, and is affecting other regions around the nation.
House prices will rise alongside demand while supply lowers, and people are now faced with two options – save up while living with their parents, or rent. The chance of owning a home is decreasing steadily, and this bodes well for the rental market. More and more people will be looking to rent, which means that landlords will face no shortage of tenants to choose between when it comes to letting their property.
Those aged 25-34 who are renting has more than doubled since 2003/2004, and this is an extra benefit to landlords. People who are starting to hit financial security and independence (but who are not actively saving for a house) will prove to be more secure tenants in the long-run.
Martin & Co is a lettings specialist operating from 282 offices around the UK. If you would like any information on how we find you the best tenants for your property, please contact your local office – our staff will be glad to help.