Here’s a statement that’ll either make you laugh or cry, or possibly both – millennials face an average wait of 59 years before they have enough in savings to get on the London property ladder.
That’s not a typo – new research from Studio B, an innovation lab set up by Clydesdale and Yorkshire banks to help combat the banking issues of tomorrow, came up with that figure when calculating how long it’d take Londoners to save up a 25% deposit.
Granted, the timeframe is likely to be shorter outside the capital, and you could get a home with a 5% deposit these days, but that’s still a hefty sum to save for many.
I’ve already voiced my opinion in previous columns on the government needing to take more action to help first-time buyers (for what’s already available in terms of help, see Mortgage help for first time buyers – government schemes and other ideas). But in the meantime, given people will likely face a ridiculously long wait to buy a home, it’s about time Generation Rent was given a better deal.
Renting can be unstable: from a monetary perspective you’ll likely have to cough up a deposit, a month’s rent in advance, and pay a fee to the letting agent – a huge sum for many.
On top of this, rents can rise each year – a recent Royal Institution of Chartered Surveyors (RICS) survey of property professionals suggested that rents would rise by more than 20% over the next five years!
That said, if your landlord or agent tries to raise the rent, it may be worth putting a case forward against it if it seems unreasonable – for example, if it’s above the rate of inflation. This way I avoided a rent rise this year.
Plus, with renting you’ve got the pain of trying to get the landlord or letting agent to fix every little thing that goes wrong – for me, that list includes a broken washing machine and cooker, a bathroom that needed replacing owing to damp, and smaller issues such as broken curtain poles.
There’s also the uncertainty of whether at the end of your tenancy the landlord may say they want you out.
But it seems the government is addressing some of these issues. In April, new measures were announced to ban unfair letting agent fees. A report from the charity Shelter found that nearly one in four people in England and Wales feel that they have been charged unfair fees by a letting agent. Fee levels vary considerably and the charity found that one in seven tenants pay more than £500.
But under new proposals, letting agents in England will not be able to charge tenants fees for signing or renewing a tenancy agreement. (Fees are already banned in Scotland, and a similar move is also being considered in Northern Ireland and Wales where there are no such rules governing letting agent fees.)
It’s hoped the measures will improve competition in the rental market and further drive up standards by placing the onus on landlords to shop around for more competitive fees for services they pay for.
I think it’s a good idea to improve transparency and create a level playing field – however, I hope it doesn’t result in landlords or agents raising rents as a result.
The proposals are now out for consultation, so if you want to submit a response, head over to Gov.uk.
Other measures the government is working on to help renters include amending planning rules so that councils can plan for more long-term ‘build to rent’ homes; consulting to allow developers to offer more affordable rents alongside other forms of affordable housing; and working to ensure longer-term family friendly tenancies are available in the private rental sector.
Let’s hope these issues are looked into quickly and aren’t placed on the back burner.
For guidance on renting, check out: Shelter.org.uk or call its free advice helpline on 0808 800 4444.