Opinion: Generation Y or Generation Renters?
Published by Max Salsbury for 24dash.com in Communities and also in Finance, Housing
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The Office for National Statistics' latest figures show that the cost of purchasing a home increased by a staggering 9.9% in the year to April across the UK, with a 10.4% growth in England.
The average property price in the UK is now £253,000 – up by almost £50,000 compared to 2010 prices.
However, the most shocking statistics are in London, with houses increasing in value by more than twice the average person’s income in the past year, taking the average house price to a significant £458,000. Furthermore, the average asking price for a home in London has risen by £4,500 a week since the beginning of the year.
The dramatic surge in house prices across England, but in particular London, has meant that life for Generation Y, those looking to get on the property ladder for the first time, has become very difficult.
Despite measures such as the help to buy scheme, with house prices continuing to increase many are still struggling to raise the funds for a house deposit, forcing the younger generation to continue renting their homes. Many housing experts have actually stated that the help to buy scheme is partially to blame for the runaway house prices. Critics say that the scheme is inflating prices by encouraging more houses to be sold without new ones being built - which was the original aim of the scheme.
While some Brits have benefitted from the dramatic increase in house prices, watching their property gain value rapidly over the past year, and selling it at a brilliant profit, those who are yet to find their way on to the property ladder have not seen the benefits. For many, it has meant they are much further away from being able to buy their first house and will continue to rent until the housing market cools.
In addition, it seems that Generation Y aren't just renting homes. According to figures from the Finance and Leasing Association, the number of cars brought on dealer finance grew by 25% in January compared to the same period last year.
While this is great for companies like Credo Asset Finance, who offer car finance in Norwich, as they have seen “significant growth” from the increasing number of people choosing car finance, it also makes us question if Generation Y are becoming a generation of renters?
Not only are Generation Y being forced to rent homes and are choosing to rent their cars, they are also renting smaller things in life such as TVs (including programs like Netflix), fridges, mobile phones (where more and more people are getting tied into fixed term mobile contracts spanning as long as 24 months), and even renting clothes.
It seems that much of Generation Y see the benefits of paying a small monthly fee, rather than forking out a big lump sum for the things they need in their lifestyle. This brings us to another question. Is the reason that Generation Y are choosing to rent so many smaller things so that they can save for that all important house deposit and finally get on the property ladder?