Yesterday the Home Builders’ Federation released a shocking report that shows young people who want to get onto the property ladder have to save for on average ten years in order to come up with a deposit. Whilst there have been an abundance of stories in the news recently about the state of the housing market, these figures really highlight the difficulties young people are facing. Even more shocking is the fact that it would take a couple twenty four years to save for a property if they are planning on living in London.
The report stated that “We are creating a locked-out generation”, meaning that many young people can no longer afford to buy their own property unless they receive financial help from their parents. Currently, the average person between the ages of twenty two and twenty nine have a monthly net income of £1,274, most of which has to be spent on rent, council tax, and utility bills, leaving only £557 for the person to live off the rest of the month.
This means it’s very difficult for young people to save, especially when you consider that this money will also have to cover the cost of food and other necessities. Even worse is that even if a young person managed to save half of this money per month through extreme budgeting, it would still take them 126 months to save a deposit. Discussing the report, executive chairman of the Home Builders’ Federation Stewart Baseley said: “The report reveals the extent of our housing crises and the challenged faced by today’s young people. Unlike previous generations that took homeownership for granted, today’s generation have a mountain to climb if they wish to own their own home.”
The private rented sector has also felt the consequences of the housing crisis, especially as demand for affordable housing has increased dramatically. Landlords have been called upon to lower their rent prices in order to help the situation, but that lack of housing means that many actually have to increase them in order to pay the mortgages. Furthermore, investing in the private rented sector is becoming even more risky, which is why many landlords are now investing in specialist landlord insurance policies to protect their properties and their livelihoods.