Myself, like many others in there twenties, are currently renting instead of looking for a house to buy. This seems to be common trend in the younger generation. So why is this trend becoming more popular? We asked popular letting company, the lettings shop, what trends they’ve noticed and we were told that in the 1980’s, the average age of first time buyers was hovering around 29 years old and that the buying age has now risen to the age of 35. That’s a 6-year increase. So why are more and more young people choosing to hold off buying their first home till later in their life?
One of the main reasons for the rise in letting is the amount of freedom and flexibility it gives you. A lot of young people move around the country for work, as well as the general uncertainty that being young brings. For example, it’s unlikely that when your in your late twenties, that your ready to settle down and plant roots in that area. Often, young people careers are just getting started and starting a family might bot be high on their agenda. This isn’t to say that this applies to everyone; however, it’s becoming a more common trend in the UK property market. However, when you’re in your mid thirties, for a lot of people the situation is different. Many people have a stable career with a stable income and are more inclined to settle down.
Let’s be honest, inflation has recently been rising and the cost of living is increasing. This equates to less disposal income. This also inevitably means that buying a house with a sizable mortgage is simple not cost effective for a fair amount of young people in the current financial climate. Often, students are in a fair amount of debt anyway so a mortgage would probably not be the best idea until their financial situation is more in the black and less in the red.
Although letting is becoming much more popular, there is help from the government to establish young people on the buyers market earlier than they thought they could. Many building society’s help run the scheme and it involves the potential buyer laying down a 5 per cent deposit for the property. The government will then supply you with a 20 per cent equity loan, which is interest free for the first five years. The rest of the amount needed to buy the property is borrowed from the building society. This is good way to get on the property market at a younger age and the incentive loan from the government is good incentive. Yes there are pros and cons of buying a property, but ultimately, whether you’re renting or buying, you need to do what best suits your current living and financial situation.