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Britain to become a nation of renters as ‘generation rent’ shuns Help to Buy
April 25, 2014Article by Ray Withers
It’s a great time to be a landlord. The UK’s changing housing market is creating an increasing level of buy-to-let opportunities, as rising house prices and shifting attitudes to home ownership lead to more and more young professionals becoming part of ‘generation rent.’
Whether priced out of the market or simply unwilling to take on the expense and hassle that home ownership entails, it seems that Brits are becoming less and less inclined to purchase property. Halifax’s latest Generation Rent report found that 36% of those aged 20-45 felt that they had no realistic prospect of owning their home in the next five years.
This is despite the launch of the government’s Help to Buy initiative, which aims to support people to get on the housing ladder by boosting small deposits. In fact, around half of those surveyed believed that Britain will become a nation of renters within a single generation.
Perhaps one of the most interesting findings of the survey was that generation rent is not born solely of the inability to purchase property due to rising prices. In fact, 20% of respondents aged 23-27 said that they have no desire to own their own home. Craig McKinlay, Halifax mortgages director, explains,
“We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one.”
A huge opportunity
Ray Withers, chief executive of specialist property investment company Property Frontiers, highlights the opportunity that generation rent has created for those with money to invest in residential real estate,
“We’re seeing a whole new crop of investors who are turning away from stocks and shares in order to put their money into property instead. Buy-to-let landlords are on the increase across the UK, with concentrated pockets in prime urban areas, such as central Birmingham or Doncaster. They are looking not just to make capital gains on their property investment, but also to generate rental income as a result of their ownership.”
Withers’ observation is backed by the latest figures reported by TheMoveChannel.com, which showed that the number of newly agreed tenancies had risen 16% month on month and 20% year on year.
With home ownership declining so rapidly, the private rented sector is blossoming. In particular, high spec urban properties designed to house young professionals seem to have captured the imagination of buy-to-let investors. Property Frontiers has found such investment properties to be so popular that the company is already offering buy-to-let purchases in four leading city destinations within the UK, while being tipped to announce the addition of a fifth city to its portfolio within the next few days. Withers concludes,
“The market in the UK is changing rapidly and, as with all trends, this has created some fantastic opportunities for those at the leading edge of the sector, like Property Frontiers’ clients.”