It’s no secret that more and more young people are renting instead of buying property. But why are so few young people buying property?
The phrase ‘Generation Rent’ has become widely known over the last ten years with house prices increasing much faster than average income; the average house price has risen since 173% since 1997, with real incomes only rising 19%, it’s no wonder buying property has become rarer. In 1995-1996, 65% of 25-34-year-olds owned their own house, but twenty years on that figure dropped to just 27%.
Out of the 14 million 20-35 year olds in the UK, it’s expected that half of them will continue to rent into their 40’s, and a third will still be renting when they hit retirement age. With the number of young people going to University also rising, young people want their independence after graduating and aren’t able to save a deposit to buy property, meaning renting is the perfect solution.
Renting is also much less of a commitment than buying a property for young people; if they want to move closer to work, or move in with a partner, or can’t afford to pay their rent if there’s a change in circumstances it’s much easier to get out of a rental property than it is to sell a house. A lot of young people are still relying on parents and other family members to help with deposits for a rental property as it is, so being able to fund the deposit for a house is incredibly difficult with the house prices being much higher than the average income.
Due to this, a huge percentage of young people continue to rent property, which is great news for buy-to-let investors. Whether it be graduates looking for independence or working professionals wanting their own space closer to their job, the rental market is booming and isn’t showing any signs of slowing down. Areas such as Liverpool and Sheffield are benefiting even more, with areas like the Baltic Triangle and Meadowhall Shopping Centre constantly providing jobs for young people encouraging them to find a place to live closer for a shorter commute.
Anyone who’s investing in property knows that now is the time to strike, especially with the stable returns and above-average yield in Northern areas. The demand for rented accommodation continues to grow as more young people are keen to move away from parents but aren’t in a position to pay the deposit to buy a property. Not to mention that whilst paying rent, it’s very difficult for young people to save for a deposit for a house, so as an investor you’ve got not only young people looking to rent for the first time but also the option of other renters that will inevitably be looking for another place to live at some point.
With demand high, supply has to provide for young professionals, and with the high yields and affordable investment prices, investors have a great opportunity to profit. Contact Urbane Brix today to find out how you can benefit from young people renting properties.