Rise of ‘Generation Rent’ looks set to continue in South West
Research conducted by Barcan+Kirby in our Citizen 2025 white paper shows that rising property prices and the ongoing housing shortage is fuelling the rise of ‘Generation Rent’ in the South West.
Figures show that nearly 40% of those aged between 35 and 54 who live in the South West don’t own their own home, with more than half of those stating that they have no plans to become home owners in the future.
South West house prices rising sharply
Whilst the house price boom has affected first time buyers across the UK, the South West has been particularly hard hit. Prices in the region are already the fourth highest in the UK and are predicted to rise a further 21% over the next five years alone.
Housing charity Shelter calculates that by 2020 the average first time buyer in the South West will have to earn £51,000 a year and have a deposit of £47,000 to afford the average house, estimated to be worth £236,000 by 2020.
This means that even those who do wish to buy a property have to wait longer, and save harder, in order to afford it.
Average age of first-time buyers increasing
Our research shows that those who wish to buy in the South West estimate they will be around 38 years old before they’re able to enter the market; three years older than the national average.
Chris Miller commented: “When you see that the average house costs more than nine times the median income it’s clear why many are delaying buying their own home or simply ruling out home ownership as an option.
The tightening of mortgage regulations in recent years has also made it harder to get on the housing ladder than ever before.”
Changing attitudes among younger generation?
Whilst some are forced to remain in rented accommodation by financial constraints, there is also evidence to suggest a growing change in attitude towards home ownership.
The so-called ‘Millennials’ – those born between the 1980s and early 2000s – are seemingly less driven by the need to buy their own home and are happy to adopt a more fluid approach on everything, from where they live to the way they work.
These two factors mean that renting rather than home ownership is likely to become the ‘new normal’ for generations to come.
This change in attitudes to home-ownership is also driving changes to traditional family set-ups, with an increase in multi-generational-living arrangements. In addition, co-habitation agreements are becoming more common as couples live together rather than marry.
Chris Miller commented: “We are increasingly seeing young people buying properties with friends, or relying on help from family members. From a legal perspective this has a number of ramifications – from issues around ownership through to estate planning.
We’ve all read the headlines about the struggle for younger people to get on the property ladder and the rise of ‘Generation Rent’. It’s clear we have to accept that home-ownership is now not an automatic rite of passage for the majority of young people.”
Our Citizen 2025 white paper looks at a range of issues that we in Britain will face in 2025, from employment to retirement and the UK’s ageing population, to family life, marriage and divorce, property, estate planning and inheritance. The paper includes expert comment from Saga, Relate, Mercer and Fox Davidson.