Two in five renters resigned to ‘generation rent’ – Hargreaves Lansdown

The private rented sector accounted for 4.6 million households in 2018/19, representing 19% of all households in the UK, according to figures released yesterday in the English Housing Survey.

Throughout the 1980s and 1990s, this level had held steady at around 10% by comparison.

The survey revealed 37% of people privately renting had dependent children – a figure that was 35% in the previous year – and between 2008/9 and 2018/19, the number of households with dependent children in the private rented sector increased by approximately 765,000.

“Two in five private renters are completely resigned to being part of generation rent,” Hargreaves Lansdown personal finance analyst, Sarah Coles, commented. “Over a third of them have children – so we’re seeing another generation being born into rented accommodation, where nobody expects to ever own a home of their own.

“Of course, there are those who actively choose to rent – particularly younger people in expensive cities – where rental affords them more freedom, and the opportunity to live in a better quality of accommodation than they could afford to buy.”

The survey results also revealed the average weekly rent in the private sector was £200 – which had risen from £193 twelve months earlier – and £341 in London, up from £312 last year.

Furthermore, the English Housing Survey found that 85% of first-time buyers had paid with savings, while 34% had help from family or friends and another 6% had used an inheritance.

Coles added there were others who were ‘more than ready’ for extra security and suggested those who are still ‘hanging onto the hope’ of buying, are renting for longer and buying later.

“The average age of a first-time buyer is now 33,” she added. “This isn’t surprising because rents are so high, and we have a mountain to climb to build a deposit.

“As time races by, not only do house prices keep rising, but it also becomes more difficult to save. Our wages may rise, but we often have student loans to repay and increasingly we also have children. This not only makes life more expensive and saving for a deposit harder, but also makes life less secure for families who move around once every four years – which can be particularly difficult when the children start school.

“It means we could do with all the help we can get in saving for a deposit. If you qualify for one, it makes sense to take advantage of free money from the government through a LISA. You can get up to £1,000 a year, which is a big step in the right direction.”

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