The BBC has published an article with some shocking statistics on the affordability of renting for young people.
The article states that “a salary of £51,200 is needed to "afford" to rent a one-bed London home”. This is an astonishing figure, particularly when you consider that this could provide you with a 10% deposit for a half million pound house (should you be able to save up these monies instead of paying them on an annual rent).
The report focuses on those in their 20's, as recent studies have shown that they are more likely to rent.
Collyer Bristow LLP has commissioned its own report looking into 'generation rent'. A copy is available here.
This report found that 100% of 20-24 year olds have aspirations of owning their own home. This seems an insurmountable task when you consider the huge rents they are expected to pay each year.
Alex O’Connor, Partner in Commercial Real Estate said: “We all know that there is a housing crisis in the UK and that it is particularly acute in London and the South East. We have seen developers bring forward new tenures, such as dedicated Build-to-Rent schemes, but home ownership remains the ultimate goal."
“It is interesting that all of our panel’s 20-24 year olds say that they will own their own home, only for those hopes to be dashed when the reality of buying a property hits home. That picks up slightly, perhaps as our panel start to marry and think about starting a family.”
Whilst measures are being implemented, new types of tenure considered and there are new and creative ways being introduced to improve the market, the housing crisis is not going to disappear and something needs to be done urgently if young people’s dreams of owning their own properties are to be fulfilled.
They face financial strain as average rents for a one-bedroom home eat up more than 30% of their typical salary in 65% of British postcode areas. Many housing organisations regard spending more than a third of income on rent as unaffordable. A salary of £51,200 is needed to "afford" to rent a one-bed London home.