Millennials have ruined everything. From credit to beer, big macs and the workforce, oil and the olympics, any newspaper anywhere has claimed they’ve killed it. Among the headlines there is also the idea that millennials do not buy houses. While 1 in 3 millennials will never own their own home is it actually generation Y’s fault that they don’t buy houses?
A study from the Resolution Foundation of 14 million 20 to 35 year olds, reported that many live and raise families within insecure rented accommodation while half of those assessed would still be renting into their 40’s and that a third, more than 5 million, could still be renting even further into claiming their pensions. 40% of people are privately renting at age thirty, double the rate of generation X and four times that of the baby boomers.
The problem with this is that the private rented market is governed by rules which work wonderfully for landlords, and more or less ok for those for whom private renting is a temporary state while they save enough to buy, but the model is deeply flawed for those for whom renting is now the norm as these people are moving into their child rearing years in accommodation, they can be turfed out of at short notice under their tenancy agreements, rents can also rise sharply at the end of the year.
In comparison, in 1960, the average first-time buyer was 23 years old, paying a deposit £595 on their first home – the equivalent of around £12,738 today. Since 2000, with the research showing house prices have risen by over £55,000 and the average deposit has increased significantly from £12,988 in 2000 to £20,622 today.Those who have bought since 2011 spent more than five years saving a deposit of £20,622 - more than half the £35,634 average annual household income. As a result, 48% of youth’s parents had to cough up £10,200 towards this cost. In the 1990s the cost of a deposit was just over a quarter of the average household income of £20,591 and only 26 per cent of first-time buyers had financial help, an average of £3,881.