Millennials facing a lifetime of rent
As the gap between house prices and wage increases continues to grow, new research predicts that a growing number of millennials will be renting for the rest of their lives.
If you were to ask the average person on the street what they hope to achieve in life before they turn 40, more often than not the answer would be to own their own home. As many average people are aware, however, this long held dream appears to be ebbing away for all but the lucky few.
The housing crisis first began to rear its ugly head over 20 years ago, when members of Generation X found that sold house prices were increasing at a rate that left wage rates in the dust. In the late nineties, nevertheless, housing could still be considered ‘affordable’ compared to the ever-widening gulf between housing values and personal income that exists today – with the average home costing eight times the average earnings.
Illustrating this point perfectly is a recently released report by the Resolution Foundation who have found that 40% of all millennials are still living in rented accommodation at the age of 30, and a third of all millennials are facing the prospect of living in rented accommodation their entire lives.
Interestingly, the comments sections of news articles relating to the matter on various websitess such as the BBC are often filled with older individuals complaining about millennials, who they believe are spending money on frivolous assets as opposed to amassing savings and starting a family. However, if they were to spend a little time examining the living costs for a young family in today’s world, they may get a more balanced picture of the inequalities suffered by those merely trying to live according to their means.
In the last 15 years alone, the number of families with children living in rented accomodation has risen by 600,000 to a staggering 1.8 million, and with reduced housing benefits due to Tory austerity measures – in an effort to reduce the national debt – combined with a stagnant housing market in the wake of the Brexit referendum, the issue is unlikely to resolve itself anytime soon.
While all pollical parties pledge to make the housing crisis the focal point of their manifestos for the next election, accountancy firm PwC estimates over 7.2 million household will be renting by the year 2025 – up from 5.4m today.
This is not only bad news for young people hoping to buy a home, it is also a nightmare for those who own but are hoping to sell their home fast in the near future as it seems that the further we look into the future, the fewer potential buyers there will be with the necessary financial clout to make an offer within an acceptable range of the asking price.
Looking for a quick sale? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.