Many first time buyers are caught in a rent trap unable to save for a deposit
The charity Shelter has found that someone renting a 2 bedroom flat would a paid £41,196 in rent between 2010 to 2015 which is the same as 19% deposit on a property for a first time buyer property of £216,528. In London they would have paid rent of £89,269 which is 23% deposit on a first time buyer property of £394,905. Shelter looked at data from Land Registry and the Valuation Office Agency.
“When just five years of rent could get you the deposit on a house, it’s no wonder England’s renters feel like they’re getting a raw deal, paying through the nose for something they can never call their own,” said Campbell Robb, Shelter’s chief executive. “Our drastic shortage of affordable homes is leaving millions of people stuck in their childhood bedrooms in a bid to save money, or in expensive and unstable private renting with little hope of ever saving for a home to put down roots in. It doesn’t have to be this way – the government can turn things around by investing in homes that people on ordinary wages can actually afford to buy, or rent for the long-term.”
The government wants to increase home ownership as a priority. The decade-long decline in home ownership has stalled. There are 22.5 million households in England and 64% were owner-occupiers in 2014/15, according to the English Housing Survey, the same as 2013/14. Home ownership peaked at a rate of 71% in 2003. To mitigate high house prices, the government has a number of schemes to help first-time buyers onto the property ladder.