Flavour Magazine

Research by Halifax Mortgages, found that while 77 per cent of potential first-time buyers expressed a desire to own their own home, the likelihood of two-thirds accomplishing this within the next five years was slim.
You are not alone. For most the thought of home ownership in 2012 is daunting. Tia Moore (26), a civil servant, says, ‘My partner and I both earn more than the average wage and have very little debt, but I am still overwhelmed by a cloud of fear when I think about rejected mortgage applications, accumulation of wasted rent money and the realisation that my dream of my own house with the back garden is just that – a dream!’

Sadly, recent statistics released in a report commissioned by the Halifax appear to give weight to these universal fears. Like Tia, a staggering 84 per cent were deterred from seeking a mortgage from a bank. Amid the figures highlighting recent trends working against the potential homeowner, were the shocking predictions that the average age of a first-time buyer would eventually rise to 43 years old, with a required deposit exceeding £30,000.

Faced with this disheartening proposition, most young people like Richard Ranghel (20), have opted to enter the rental sector as ‘it’s convenient, releases the burden and stress surrounded around the whole housing issue and ultimately gives you the freedom to enjoy being young!’ As a temporary measure renting seems ideal, although one might have second thoughts after looking at the findings from research conducted by Findaproperty.com Shockingly, they calculated that the average young person would spend 16 years within the rental sector, spending an estimated £308,558, ultimately exceeding the average cost of a house in London by £51,309.

With the apparent rise of property entrepreneurs and innumerable seminars promising to provide you with ‘ways to successfully turn property into money’, one may be slightly confused as to where this phenomenon has emerged from. The evolving Generation Rent is evidently an accumulation of factors, ranging from the current financial crisis and dramatic fall of youth employment to the severe rise in the cost of living. Rico Montes (22) blames the previous government. ‘Now the younger generation are having to pay for their mismanagement of funds and careless blunders with punitive university fees and unattainable house deposits.

It appears it is a clean knockout in the first round, leaving the landlord residual reigning champion. While first-time buyers are at a disadvantage, the 25 per cent increase in lending to landlords clearly illustrates banks have diverted their attention to entice successful property investors in the buy-to-let market. Provided with an impressive array of 500 different mortgages, a dramatic increase in rental searches and huge demand, the landlord is clearly reaping the benefit.

Michael Brown from property website House Pals believes the wheel has turned full circle. ‘Five years ago it was easy for young people to get onto the housing ladder; conversely there was a decline in rental, flat shares and prices as a whole. I think the flat share and rental market will see a double digit growth in a three to five-year period.

One apparent factor influencing the housing debate is the immense disparity between the priorities, aspirations and standards of living set by young people today compared to their older counterparts. While our ancestors worked tirelessly, prioritising employment during periods of hardship, such as the miner strikes and Thatcher years, they still had the realistic opportunity to work towards buying property. As a result, criticism has been raised around the lack of that ‘long-term saving mentality’, with statistics showing 95 per cent of young people struggling or choosing not to save some of their disposable income.
Maria Smith (32), who owns two properties, says ‘We are immersed in a technological era, so while our parents focused on work, family and land, we are spoilt for choice when it comes to investing. Rather than slave away for a property that will require sacrifice and excessive hours, we can opt for fast cars, flexible hours and expensive gadgets. As a consequence we live for the day and are drawn to the “quick fix”.’

The fact remains that with the rising cost of basic needs and a government struggling to manage
the debt of the country, saving seems to be an enormous feat and renting the way forward. So for existing tenants and those looking at the prospect of renting, here are some words of advice:

Robert Nicols recommends you ‘remain realistic, downsize if necessary, decide what is important’.

Consider shared accommodation, for no more than a third of your salary.

Michael Brown says, ‘Make sure your prospective landlord is up to date with regulations and a member of the deposit scheme. Ensure all gas safety checks and electrical checks are produced with certificates and don’t forget to get the landlord’s address and contact numbers.’

Most importantly, be patient, as sometimes you have to retreat in order to move forward. History exists not only to give perspective, but also to teach us lessons and if our ancestors were able to work through adversity to save for a deposit, then surely we can learn the benefits of endurance, sacrifice and hard work to obtain that dream house!