By Emily Maree, Creative Content Editor for Plentific.com
Renting versus buying has always been a tough choice, never more so than the last 10 years. Many moons ago, our parents would have bought a property and are probably still at that address now – they’ve hung up their coats and they’re there for the long haul. However, Generation Y have a very different way of looking at property and the way they engage with it. Shorter attention spans and itchy feet has given a massive rise in renting as the younger generation want less stability but more incentive to go travel the world or start their own businesses.
To add to this, property market projections published late last year by property company Savills gave a bleak outlook to all interested in buying in the future. Property prices set to rise 25% over the next five years indicate that there will be 1.2 million more renters by 2019 and the growing age divide in the country isn’t helping. Two million Britons between 25-44 left the UK from 2002-2012 and are much more confident buying property abroad as there is far opportunity to do so.
Even for those staying at home, there are issues with trying to either rent or buy. A study done by charity Shelter last year showed that nearly two million people between 20-34 are still stuck living with their parents because they simply can’t afford to pay rent. Latest figures show it takes the average person until the age of 37 to save for a deposit without financial help from parents, which is just too high for most and has made it unsurprising that so many young people live at home.
It’s certainly not all bad news though. The Government are coming up with certain schemes to give people that first step onto the property ladder. ‘Help To Buy’ has boosted house building and helps first time buyers and property ladder climbers buy homes with just a 5% deposit – a fraction of what they would usually have to pay. The ‘Rent To Buy’ scheme, started in September 2014, allows people currently renting to save for a deposit at the same time to be able to afford a house. 269,000 first-time buyers took the plunge in 2013 and we can only hope that this will stay on the rise.
Once downmarket but now fashionable areas such as Hackney, Shoreditch and Whitechapel have become a haven for the renting hipster generation over the last few years but the youngsters are now moving further outside of the city to be able to afford places of their own. A Halifax Survey has shown that the average first time buyer property in London costs £306,354 with a staggering £76,435 average deposit, which is just too pricey for those young first time buyers.
With areas like Acton Town, Sydenham and Haggerston cited as the new up-and-coming places to buy property, it’s very clear that ‘the new excluded’ – a phrase coined by Mervyn Jones, a housing analyst with Savills – are heading away from the action in order to put down their roots. With excellent transport links (most of the time, at least!), you can be in London in the blink of an eye and young people are starting to get the confidence to buy in these further out locations, both on their own or as shared ownerships.
The biggest difference with the way Generation Y are engaging with property is the way they find it. Years ago, it took a trip to the estate agent and countless phone calls to arrange viewings and deals. Now, we have websites like Plentific that can do it all for us from calculating deposit costs to help you sign paperwork – we tell the computer where we live and how many bedrooms we want to find hundreds of places at the click of a button. However, there can be a couple of problems with this. Too many of us are waiting for our perfect property when it is all too clear that we won’t be staying in that one spot for the rest of our lives. First time buyer fear can leave people searching for too long to find the ‘perfect’ property when it may be wiser to get your foot on the ladder first.
There is also too much trust in the way a flat looks online. Kirstie Allsopp, TV presenter and property hunter, says the worst thing people can do is say yes or no to a property without seeing it online first.
“You should never underestimate the physicality of a property”, says the veteran house hunter. “Quite often, I meet people who say they’ve looked at 100 properties, when the fact is, they haven’t been to see them, they’ve just seen them on the internet. And that simply doesn’t count.”
As we’re finally seeing a glimmer of light at the end of the tunnel when it comes to the economy, we can only hope that young people can build the confidence to invest and engage with property again. Even if they are moving out of London, as a country, we need more first-time buyers investing in the home market, creating their own investment opportunities and taking that first step on the ladder.
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