The vicious circle for “New Generation Renter’s”

In October 2018 the BBC reported that about 40% of young adults could not afford to buy one of the cheapest homes in their area even with a 10% deposit, according to a new research.

A statement which is reinforced by reporter Simon Lambert for who states “The biggest barrier to buying a home for many people – or to moving up the property ladder to a larger one – is saving the money needed for a deposit. Even if first-time buyers could save every penny they earned for six months, the vast majority still couldn’t raise a 10 percent deposit”.


The Institute for Fiscal Studies (IFS) said house prices in England have risen by 173% over two decades, but average pay for 25-34 year-olds has grown by just 19% over the same period. In 1996, 93% of those with a deposit who borrowed four and a half times their salary could purchase a home, but that fell to 61% in 2016. The IFS also said that higher rental costs – up from an average £140 a week to £200 a week in England – have “reduced the purchasing power of young adults’ incomes” and made it harder to save for a deposit.


‘Impossible challenge’

Within the same article, reported by the BBC, Bradley Tucker, a 27-year-old recruitment worker from King’s Langley in Hertfordshire explained that he is struggling to save for a deposit. He and his partner have moved from a rented flat to a shared house, so they can start to save something. But while his dad – a bricklayer – managed to buy a house after just one year, Bradley estimates it will take them at least a decade. “On a current trajectory, the cheapest deposit is £15,000 to £20,000, so you’re looking at 10 years plus,” he told the BBC.

“For young people, it seems an almost impossible challenge. It’s a depressing outlook.”


The IFS say property prices over the past two decades have risen well above the average income, leaving ‘Generation Rent’ priced out. Rent prices are also at an all-time high nationally, making saving for a deposit more difficult.

‘Many young adults cannot borrow enough to buy a cheap home in their area, let alone an average-priced one,’ coauthor of the IFS study, Polly Simpson, told The Evening Standard.

Looking Forward

One think tank has suggested that the government should give UK private renters a chance to buy their home by rewarding landlords who sell to long-term tenants.

The IFS said: ‘Increasing the supply of homes and the responsiveness (or elasticity) of supply to prices is crucial. Planning restrictions make it hard for individuals and developers to build houses in response to demand. Easing these restrictions would reduce (or at least moderate) both property prices and rents, boosting homeownership and benefiting renters who may never own.

We are extremely proud that our Rent to Buy Initiative is a true, affordable housing scheme which provides a natural spring board for the “New Generation Renter’s” to be able to buy their own home within their current means whilst maintaining a decent standard of living.