A generational thing
Following a trend is common amongst the young generation and in the property market, renting has certainly been the hot trend over the past five years.
No longer are youngsters growing up and aspiring to become homeowners on the ‘property ladder’. For many young adults their first experiences of living away from home is in rented accommodation at university.
Whilst for those that choose to enter employment after leaving school, the property ladder is proving far too expensive, without a peg up.
Private households set to grow by 1m in next five years
Savill’s research shows that homeownership could be overtaken by rental as the UK’s dominant form of housing in the future.
They also said that by 2019, private rented households will grow by 1.2m, taking the number of rented homes in England and Wales past the six million mark; 24% of the national total.
- 2/3 of all households where the primary resident is under 35 years-old will be rented by 2019
- Strong growth predicted in the 35-39 year-old age bracket; increase expected by 30% or more
The Estate Agents believe a combination of cultural and economic factors will be behind the change.
Cost of living affecting decision makers
It has been well documented that the cost of living has risen dramatically over the past five to ten years and such an increase is having effect on whether people buy or rent. Savills report found that the number of people who can afford to buy is shrinking rapidly.
As a result, the number of owner-occupied home is expected to fall by 200,000 to 14.67million. It will take some time for rental to overtake homeownerships, but the signs do indicate that times are changing.
Change in culture is changing the market
Richard Carr believes that many people still aspire to own their own home and that it would be sad if people did lose that desire.
However, he feels that the Europeans who now reside in the UK prefer a better standard of living and would rather rent than save to own a home, which would reduce their disposable income.
It’s only in recent times that having a mortgage has been cheaper than renting as a result of the country’s interest rates been at a historic low, but this won’t be the case forever. Richard can remember when they were over 10%, when owning a home was costly!