Almost half of Millennial homeowners polled have warned their 21-35 year-old peers to stay put and continue renting, as the pendulum swings away from home ownership due to falling house prices, high costs of home ownership and growing recognition of the benefits of renting.
Three in four (74%) believe there are better investments to be made than property with highly fluctuating cryptocurrencies, such as Bitcoin, seen as a better investment by over a fifth (21%) of 21-35 year-olds. The research also found that:
- 37% of those homeowners complain that the value of their property dropped in first 12 months
- More than half (57%) underestimated the cost of buying their first home
- 45% of homeowners said their monthly costs are much more than if they are renting
The findings have been unveiled in research of over 3,000 UK Millennials by Get Living - the UK's pioneer of build-to-rent homes and best known for East Village, the former London 2012 Athletes’ Village. The report ‘Millennial Living in 2018: Insights for the UK ‘build-to-rent’ sector’ reveals caution around property investment, support for renting and optimism around income growth.
The advantages of renting are starting to ring loud and clear, with 9 in 10 Millennials seeing the benefits, and with the flexibility to relocate being the most valued benefit to renting. Half of the homeowners (49%) admitted they lived in a more convenient location when renting, with homeowners paying on average two thirds more on commuting each year (soaring from €724 (£638) for renters to €1153 (£1,016) for homeowners).
Millennials are also confident in their futures, expecting their income to almost double over the next five years (expected increase of 90%). In London, optimism is even greater, with Millennials expecting a 119% rise in income by 2023.
Neil Young, CEO of Get Living, said: “These results provide an insight into a generation in the vanguard of the new on-demand subscription society where it’s increasingly common to rent, rather than buy, with the likes of Netflix, Spotify and Uber leading the way and now homes set to follow. What we’ve found in this report is that ’Generation Rent’ are cautious when it comes to property investment, optimistic for the future and value the flexibility that renting offers. These shifts can’t be ignored. It’s time the property sector grew up too and changes the way homes are built, managed and experienced. For us that means we need to continue to make renting a simpler, fairer and positive experience – not just in London but across the UK. In our first five years, we’ve ignored the preconceptions around Millennials. We’ve found this generation are responsible renters, so we scrapped the standard six-week security deposit. They want to feel secure in their home, so we offered longer tenancies. They need flexibility, so we have a break clause after six months. They want transparency, so we’ve never charged fees. They’re a generation that’s savvy, safety-conscious and always connected. They don’t just eat avocados.”
This research follows a recent report by the Resolution Foundation, which called for the Government to implement overhauling reforms for the PRS sector to help support the 40% of Millennials who will still be renting into their 40s by improving the security of tenure with longer tenancies, rent stabilisation, and an overhaul of the benefits system.
In 2013, for the first time, private renters in the UK overtook owner-occupiers aged 25-34. According to the Government’s latest English Housing Survey, this trend has since sped up. Accompanying this trend has been the arrival of the `build-to-rent’ sector, offering high standards of design and placemaking combined with enhanced resident services.