It’s no secret that it’s becoming increasingly difficult to take the first step on to the property ladder, and this is unlikely to change any time soon with nearly half of tenants believing that they will never own a home of their own.
A survey by the wealth management company Fidelity International found that some 45 per cent of UK tenants firmly believe that they will never own a property of their own.
The majority of respondents said that they didn’t have the financial means to purchase a property and this should come as no surprise – the average tenant is now spending around a third of their monthly income on rent which leaves very little room to save up for a deposit when taking into account living costs as well. There isn’t just the deposit to consider either, first time buyers will also have to fork out for legal, survey and arrangement fees, not to mention the cost of moving to a new house. Buying a house has now become so expensive that the average age of the first-time buyer has increased from 31 to 33.
However, it could also be argued that renting is simply more suitable for the modern lifestyle. According to a survey carried out by the letting compliance firm VeriSmart earlier this year, homeownership had dropped 5 per cent in the last nine years and this was down to a lot of people choosing to rent instead of buying a property. The flexible nature of renting is a lot more suitable for the current generation of tenants who are looking to move around for work and leisure.
As for those in the private rented sector that want to buy a property, how can they give themselves the best possible chance of getting on the property ladder? There are a number of ways to buy a property that requires a smaller deposit, such as a Help to Buy Scheme and shared ownership. There are also mortgage deals available that cover some of the upfront costs such as valuation and legal fees, so first-time buyers will only have to worry about their deposit. Naturally, there is also a huge amount of financial planning involved, tenants will need to sit down, review their finances and figure out where they can save money. There are a number of apps and websites that make this process a lot easier, so it shouldn’t be too much of an inconvenience.
Although tenants have to seemingly jump through multiple hoops to get on the housing ladder, the upside is that the private rented sector is forever evolving to suit the needs of long-term renters so eventually, there will be less pressure for people to buy a property of their own in years to come.
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