Are private renters in the UK saving, and if so, what for? Buy-to-let lenders Landbay recently carried out a study of 2000 private renters throughout the UK in the hope of finding out first and foremost, if the nation’s private renters are saving, and if so, what they’re saving for.
The study found that the majority of private renters are indeed actively saving, with over three-quarters of those asked saying they put money aside each month. It was found that people save around £99 a month on average – £111 for men and £91 for women – however the financial goals of those who are saving differ significantly.
The popular assumption is that renters who are saving intend to buy a house in the future, however the study found that buying a house was in fact only the third highest priority for UK renters. It was found that saving for a holiday is actually the number one goal for current renters. Of the 2,000 people surveyed, 33% said that they would rather take a vacation as opposed to saving to buy a property. This consensus was truest for women, with 38% in favour of booking a holiday compared to 26% of men.
As well as saving for a holiday, renters in the UK also preferred to save for an emergency fund rather than a house. It was found that 31% of renters put money aside each month to prepare for any unexpected emergencies that may occur. Compare both of these figures to those saving for a house, just under a quarter of those surveyed (23%) are actively saving to purchase a property.
Landbay’s CEO, John Goodall, had this to say regarding the study, “The widely held assumption that renters are simply biding their time until they can afford to buy a house has been proved wrong. Renting affords a disposable income which savers are using to fund the lifestyle they want, whether that’s a lavish summer holiday or preparing for retirement. This, alongside the increased demand for flexibility, means the private rental sector is appealing to a wider range of people, and as such is getting more necessary by the day.
“For the new Government, investment in the private rental sector will be crucial. The penalisation of landlords must stop, and the rights of tenants and landlords alike need to be protected.”
The study also revealed that the 18-34 age bracket is the most likely to be saving up to buy a house. 38% of 18-34 year olds said that they were putting money into their savings every month with the intention of buying a house. This is a significantly larger proportion when compared to their older counterparts, with just 25% of 35-54 year olds saving up to buy a house, and an even smaller 3% of 55+ renters.
The younger generation of renters were also found to have a much clearer idea of what they actually were saving for. 40% of renters over 55 and 29% percent in the 35-54 age bracket admitted that they were saving for the sake of it, with no clear goal in mind, compared to just 17% when it came to 18-34 year olds.
The general attitude towards home ownership and renting in the UK is continuously shifting towards renting. It was recently reported that Britain is expected to become a nation of renters by the time 2039 comes around and the lack of prioritisation when it comes to saving to buy a property only solidifies this claim.
Renting is slowly becoming the social norm across an ever-increasing range of generations. Are you looking to find your next rental property? We have homes of every type available across the country, whether you’re looking for a three-bedroom house in the suburbs or a stylish inner-city apartment, your next home might be right here. Book your viewing today.