There is a reason so many properties for sale in the South East are marketed as potential investment properties – per two-bedroom apartment, renters pay on average £289 more than they would for the mortgage on a similar property. Investment property owners rely on renters’ willingness to pay more than the mortgage price per month, which they are; however, this begs the question of why so many people are still willing to rent even when it costs more.
Getting a deposit together
One of the more obvious reasons is the issue of raising the current average deposit of £51,905. Even with a good income, finding this kind of cash without help from the bank of mum and dad is often impossible.
In a joint income partnership, scrimping and saving towards a five-year saving goal would seem a sensible option; however, many millennials remain renters.
This is a pattern Gloucester sales and lettings agents see often. The general desire to buy is there, but the impetus is missing. Many young and middle-aged adults voice a desire to buy but don’t complete, citing a lack of available properties. As agents such as Alex Clark Glos now part of TGRES can testify, there are properties available. The average house stays on the market for three months before finding a buyer, which is ample time for someone with a deposit to jump in and buy; however, the reason many remain renting is much more complicated.
Many renters are simply afraid to commit to buying a house. In these days of fear of missing out, young professionals are fearful of buying a property in case a better deal, lower mortgage rate or interest rate is around the corner. With government incentives always in the pipeline but rarely landing, first-time buyers are understandably fickle.
There is also the uncertainty of buying a money trap. Millennials are afraid of buying a home that will need a new roof in two years’ time or one in which they are responsible for a broken washing machine or boiler.
While these are very realistic possible costs, they should not be enough to deter someone from getting on the property ladder. In the end, you do save money by buying your own home; however, the question remains how much?