Generation rent - the reality for millennials
Young people are still bearing the brunt of Britain’s housing crisis as new stats from moneyguru.com show that millennials make up a huge 60 percent of those renting in the UK.
The study also uncovered that over 57 percent of all loan applications made through the credit comparison site were submitted by millennials, with 13 percent of these applications being submitted to cover special occasions such as weddings or holidays with friends, while other applications looked to fund debts and everyday subsistence.
Today, renting seems to be the new norm, but are millennials renting out of choice, or is there simply no other option?
There was a 259 percent increase in house prices between 1997 and 2016, a survey by ONS revealed, while incomes over this 20-year period only rose by 68 percent. Is there any wonder why Millennials are turning to renting over buying? The data also indicated house prices are 7.6 times more than the average annual income; more than double the figure 20 years ago.
And the bad news doesn’t end there for Gen Y…
A recent study by the Resolution Foundation found that up to a third of millennials could be renting their entire life. Accountancy firm PwC predicts that the increasing house prices could see 7.2 million households renting by 2025; an increase from 5.5 million in 2018 and 2.3 million in 2001.
So, will giving up those daily flat whites and saving your pennies (that aren’t already being spent on rent) really help you onto the property ladder? The experts at moneyguru.com say yes! By cutting out buying a coffee five times a week and taking your own from home, you could save around £546 a year, which is a great start towards getting your foot on the rung.
Here are a few small changes that will help you take a step away from a lifetime of rent, and a step towards your forever home:
1. Set yourself a goal
Take a second and think about what you want to save for – for millennials, it may well be a deposit for your first house, a car, or anything at all. Set yourself realistic monthly goals of what you’re saving for and when you’d like to achieve it by. This will help to make setting aside a little bit of cash each month more manageable.
2. Check your credit score
In 2016 a report showed that 53 percent of UK households have never checked their credit score or obtained a credit report. If you know what your credit score is and what that means to lenders, you can work out how to improve it over the next year. Your credit score can affect everything from mortgages and car insurance to getting a job, so you need to make sure it’s as healthy as possible.
3. Work out where you spend
After the big things like your bills, rent, and monthly shop, it’s easy to spend your remaining money on anything and everything, and you’ll soon wonder where your money has gone. Make a budget and work out where your disposable income is going and see what you can live without. Cutting down on eating out or even knocking one drink off your Friday round can make a huge difference.
The ladder might seem high but the Money Guru is there to give you a leg up. Visit moneyguru.com’s Wisdom page for the latest financial information and top tips to help you on your journey to becoming a homeowner.