London tenants remain optimistic about buying – eventually
Though London has the highest house and rental prices in the UK, it seems residents remain optimistic and believe they will eventually be able to take the first step onto the property ladder.
Leading flat-share site, SpareRoom.co.uk conducted a survey of 10,000 tenants of all ages from across the nation. Reported figures have shown there has been a 50% increase in the number of renters who never see themselves becoming a property owner. However, those who are currently renting within London feel their outlook is promising, with just 17% saying they are likely to never get onto the property ladder.
Matt Hutchinson, Director of SpareRoom.co.uk, says, "For nearly one in five of Britain’s ever-growing population of renters, aspirations of home ownership are slipping away.
"Price rises seem to be unstoppable, with a typical London home now clearing the £500,000 mark, and prices for first-time buyers rising faster than prices for owner-occupiers."
From the respondents, nearly half believe they won’t be able to afford to buy their own home for at least another 5 to 10 years, and nearly 1 in 4 claim they will need at least another decade.
With rising rental prices, tenants are struggling to be able to afford payments. Around half of renters are currently spending between 30 and 50% of their salary on rent alone — with nearly a quarter using more than half of their total salary.
London residents are feeling the pinch more than most, with staggering house and rental prices. 25% of London renters estimate they will need more than 10 years before they are able to buy their first property, as they are unable to save a sufficient mortgage deposit.
"Coupled with rising rents eroding savings, it’s hardly surprising that such a significant proportion of renters have resigned themselves to never owning their homes." Hutchinson added.
"The reality is that many young professionals will never own their homes. Attitudes to renting for life will have to change as, like it or not, we are heading towards a European approach towards property, where so called ‘lifestyle tenants’ are the norm.
"Given the British love affair with property ownership, this is going to be a major cultural change."