A lifetime of renting likely for more Britons
Author: Rent Guarantor
In years gone by, home ownership was an achievable goal for many hardworking Britons. More recently, that has changed and even those who earn a good wage can struggle to buy a property in their preferred area – or indeed any area at all. With this new reality comes the fact that for some people, they will always be a tenant, throughout their working life and also as a retiree.
Specifically, a new study from Fidelity International shows that 45% of people who are currently renting expect they will never buy a home in the UK. Of course, in some cases, this is a positive choice as renting is something that affords them flexibility and the option of living in or near the centre of a city they love.
For others, it's because buying a home of their own is just too expensive and even after many years of saving – while they also rent - they just can’t put together the deposit they need for the home they want to buy.
3.4 million young adults living with their parents
The study shows that some 3.4 million young adults aged between 20 and 34 are living with their parents, with 65% of this age group confident they will become home-owners in the future.
Meanwhile, one-in-four people aged 34-54 are currently living in rental accommodation and 23% of that group think they will never become a home-owner. Some of them may be right as 24% of over 55-year olds still rent, too. However, around 10% of this older age group continue to harbour ambitions of owning their own home.
As you can see, as people who live in rented accommodation do so for longer and later into their life, their expectations of buying their own property begins to fall; from 65% among under 34-year olds to just 10% in over 55’s.
The study also found that for renters as a whole group – not split into age – 45% don’t expect to ever become a home-owner. Again, many of them will likely be correct as data shows the home-ownership rate among people living in the UK is now 63%, down from 73%.
“Home ownership is deeply engrained in the British psyche and the inability to get on the property ladder can be hard to accept,” said Fidelity International’s investment director for personal investing, Tom Stevenson.
“Renting can feel like throwing money away and the flexibility it offers is no substitute for the feeling of security that owning a flat or house can provide. These emotional considerations can matter quite as much as the obvious financial benefits of home ownership in recent years,” he added.
Renting options expand
For those for who are likely to live in rental accommodation throughout their lives, there is good news; things are changing. Just like in many European countries where renting is the norm, particularly in cities, there are a growing number of options for tenants in the UK to accommodate this change in tenure.
While the Private Rental Sector and Buy-to-Let landlords appear to be struggling a little right now, under the weight of tax and rules changes as well as political uncertainty, it is still continuing to grow. And thanks to some of those rule changes, the properties they rent out are of a higher standard and also include lots of welcome energy efficiencies.
In addition to that, institutional investors are now becoming increasingly interested in the Build-to-Rent sector and a number of new buildings have been competed with plans for more also in the pipeline. The development of this sector is something that is a real positive for the still rising number of tenants in the UK.
Investment in housing associations is also improving, albeit from a low base. This means when you put all of this together, there is some hope that lifetime renters will have choice and possibly even more security in their rented homes.