You may have heard of the much-discussed ‘Generation Rent’: the young adults in their twenties and thirties who have put aside their dreams of home-ownership in favour of long-term renting.
There are many reasons why this generation often feels locked out of the housing market. Lower wages, insecure employment, outrageous house prices and difficulty obtaining a mortgage are all among the factors which have led to this situation. However, a story less often told is how the UK’s landlords are profiting from this situation – and creating prosperity.
The new class of landlord
Alongside the new generation of tenants, a new generation of landlords has also developed – many of them first-time property moguls eager to get as much money from their properties as possible. Buy-to-Let has seen a dramatic swell in popularity, with a chance to both cover costs through keeping the property occupied, and develop a property portfolio from the ground up. Elsewhere, some landlords have ‘gone large’ on their investment, with control of dozens or even hundreds of properties within a selected area of the country. With rents at a historic high, these properties are then converted into large profits, sometimes at the detriment of the tenants who live there.
Making money from property
There have been numerous stories in recent years detailing how Buy-to-Let schemes are encouraging the upselling of properties, and allowing landlords to benefit from tax breaks in the process. Even the most ethical of landlords cannot help but capitalise on the favourable market conditions which have created a scarcity of rentable properties, and a huge swathe of individuals, couples and families eager to find somewhere to call home. Whilst many people still long to own a home of their own, these aspirations have often had to be parked by those among ‘Generation Rent’, either temporarily or in the long-term.
Prospects for Generation Rent
The cost of living continues to rise – with rent often considered as one of the primary expenses each month. Curiously, average rents are frequently found to be higher than the average monthly mortgage payment, making property ownership a gate-keeper issue as much as it is a matter of budgeting and the good fortune of having already purchased property before pricing got out of control. Thankfully a new wave of property investment tools is allowing this audience to gain a foothold on the UK property ladder. Home ownership for ‘Generation Rent’ may not look like it did for their parents, but it is still possible.