Property ownership not the be all and end all for young Brits

Property ownership not the be all and end all for young Brits

42% of people aged 35 and under who are renting are happy to do so for the next ten years or more

Owning your own property is a very British obsession, an ambition we've been culturally conditioned to work towards, and a notion that feels as old as bricks and mortar themselves. But we are witnessing a wave of people who are plumping for tenancy over ownership.

The number of households in England that are privately rented rose from 2.4 million in 2005 to 3.8 million in 2011-12, a 58% increase and over half  (52%) of adults in the UK aged under 35 live in a home they don't own. What's more, new research from protection specialist LV= shows that this trend is likely to continue as the younger generation's attitude to renting is changing. 42% of renters aged between 20 and 35 are completely happy to rent for ten years or more and claim that it's not important to them whether they ever end up owning their own place.

The research figures indicate that a seismic shift in attitudes to renting is taking place. Whereas nearly all of the previous generation of Brits polled (those now aged between 55 and 75) saw owning their own property as the ‘ultimate goal' (93%), only a third (33%) of people under 35 now feel the same way.

In line with this, half of all renters (43%) no longer see bricks and mortar as a sign of success, and almost three quarters (70%) say the notion that it's in some way shameful to never own a property is completely out of date.

This more relaxed approach to owning property might be considered refreshing but it comes with a number of hidden perils including little leeway for renters should they not be able to pay for their accommodation and a lack of renters taking out income protection insurance. This is particularly striking when you consider that the cost of renting remains high enough to sink stomachs (and bank balances), with the average renter paying out 39% of their income on rent alone. That's around £947 per month, and rises to £1,152 in the South East where rents are highest and consume nearly half (44%) of a person's monthly income.

Mark Jones, LV= head of protection, explains:

"It's important to realise that renting does come with certain pitfalls that often aren't signposted. When buying a property you are encouraged to take out an insurance policy to guarantee repayments in the event that something happens to the mortgage payer, no such prompt exists in the rental market. We know that one third of Brits currently rent and that 65% of these people have no insurance in place. This would leave a huge number of people in the UK in a vulnerable position if they found themselves unable to cover their rent and living expenses.

Regardless of whether you are a homeowner or a tenant, it is important to have a financial back up plan in place which would enable you to carry on living in your home if you were unable to work. This is particularly important if any loss of income might affect your partner or family's ability to pay the rent."

Indeed, far from being students or first job flat sharers, the majority (72%) of 20 - 35 year old renting are either married or in a relationship and earning an average of £34,084 a year.

Although ‘Generation Own' needed no excuse other than ‘it's the done thing' to explain away their obsession with buying, the current generation's reasons for renting are somewhat more varied. Casting aside the compulsion to set down roots, one in six (17%) young Brits rent because they don't want to be tied down to any one place. 13% would rather get a feel for their area and their neighbours before making a decision, one in 10 simply have no inclination to buy, and 7% would rather spend their money on other things than putting it into property.

In addition, the nations' tenants are clearly unmoved by the government's recent ‘Help to Buy' scheme - 79% of the 1,700 20 to 35 year olds polled said this latest initiative hadn't motivated them to put a foot onto the property ladder.

Naturally there are many young people that still want and hope to own property in the future - as reflected in the recent increase in first-time buyers. However, they're realistic about when this will happen. While the previous generation expected to be ‘kings of their own castles' by the age of 25, young folk today can't see themselves putting down deposits on places until they're at least 36.

Mark Jones concludes:

"Depending on your point of view an end to the Great British insistence on owning a home might come as a long-overdue breath of fresh air. While previous research has suggested that those in ‘Generation Rent' have had renting forced upon them by rising property prices and low mortgage availability, this report shows that huge numbers of young men and women are freely choosing tenancy and actually prefer it to ownership.

However we would urge anyone renting to ensure they have a contingency plan in place, such as income protection, to keep their rent paid should their financial circumstances change for the worse."


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Latest Comments

Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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