In recent years, the number of people who choose to rent homes rather than buying them has been rising consistently. One of the main drivers behind this has been young people, who are by far the largest demographic in the private rented sector these days.
According to recent Savills data, the number of tenants in the UK private market at present is around 5.3 million. Of that number, 1.5 million are aged between 25 and 34-years old, making this demographic the most prominent. But what is the reason for this, and why do young people increasingly choose to rent rather than buying properties? Here, we take a look at a few of the most common reasons.
Cost and saving
While there are many young people who prefer to rent rather than buy homes, there are also those who simply cannot afford to buy, or who see the cost as a challenge to overcome. One of the main reasons for this is that the typical buyer needs to be coming to market with a ten per cent deposit, which means needing around £20,000 before being able to buy.
For many, this is simply unaffordable, while for others renting offers them the chance to get their own place, while also being able to afford to save up to become homeowners further down the line.
Convenience and freedom
Another huge reason many people of millennial age choose to rent rather than buy is because they want the convenience that comes with being a tenant. More than ever before, young people are coming out of school and university with their eyes on building a career, and for many, this is the single most important aspect of their life.
Being a tenant rather than a homeowner allows them the freedom to do this, as they can make career choices they could not make if they were tied to an area by their house purchase. When it comes to moving home, it's far easier to move from one rented property to another than waiting to sell a house, which can prohibit the ability to further their career.
Young people are probably more financially savvy at the moment than they have been at any time in the past, and for this reason, many are adopting something of a wait-and-see attitude to the market, which means renting rather than owning property.
Whether it's the implications of Brexit on the housing market, the potential for interest rates to rise - taking mortgage payments up with them - or the uncertainty around capital gains, many young people are seeing the next couple of years in the housing market as a period that needs to be waited out. As a result, many are choosing to rent rather than buy, allowing them to make a measured decision in the future regarding when would be the best time to get on to the property ladder.