The success of the UK rental sector is set to continue as new research shows that home ownership remains out of reach for many. The research has revealed that on average, by the time people purchase their first property they will have spent approximately £52,000 on rental accommodation.
The data was compiled by the Centre for Economics and Business Research for the Association of Residential Lettings, and also shows that the average first time UK buyer in 2016 will use £16.4 of their total lifetime earnings for the length of time they are a tenant. The average amount spent by London renters before they buy their first property is £68,300. In 2014 people used approximately 22% of their wages to pay for rented properties with that figure rising to 30% in the capital.
When people move out of the family home they will typically spend 13 years in the rental sector before they are able to buy their first home. The results of the report highlight the fact that those leaving home to rent in 2016 will spend on average £64,400 before being able to get on the property ladder. This is around 22% more than first time buyers will spend on their first homes in 2016.
Renters in London will see £91,500 of their earnings over the years go towards rented accommodation which is £23,100 more than London house buyers will pay this year. Despite these statistics, there is general optimism within the younger generation who feel confident that they will eventually buy their own homes and are happy to continue renting until then.
Landlords and investors in London are benefitting greatly from the influx of renters from all generations. The demand for suitable and affordable properties is high, and now is an opportune time for landlords, developers and portfolio holders to enjoy lucrative investment returns that can turn into long term financial solutions.
We provide a range of professional investor services and property management and we are the preferred choice throughout the capital. If you are looking to maximise on your property investment in Croydon or any other area of London, or are interested in finding your next opportunity, our team of property specialists can help you secure the right properties and facilitate successful tenancies.