Homeownership has always been considered to be a massive milestone in people’s lives and many see it as a success in creating a good future for themselves. That is especially true when it’s happening for the first time and beginning a completely new chapter of your life where you will start taking more responsibility and accountability for all your actions.
While many dreams of having their first homes and embarking on this challenge, others either don’t find it as appealing these days or simply cannot afford it. Nowadays, it is more common to rent your home rather than buy it due to the ever-increasing housing prices. As a matter of fact, it is believed that many young people will never be able to afford to become homeowners in their lifetime and are often referred to as ‘generation rent’ which is raising the question of why.
Why can’t this generation afford to own housing? Do some people purposefully choose to rent all their lives and why? Is ‘generation rent’ a reality or is it a myth? Here at House Sales Direct, an online estate agency, we have covered everything there is to know about it and why it has become so common that even a special term has been made up about it.
What is ‘Generation Rent?
The term ‘generation rent’ usually refers to that group of young adults or those aged between 18-40 years old who will most likely spend most of their lives in rented accommodation rather than purchasing their own homes. The generations which typically fall under that category are Millennials and Gen Z but the list is not exhaustive because these are difficult financial times we live in and it has become incredibly hard for many people, regardless of their age, to afford not only their homes but their electricity bills and everyday essentials too.
While most of these people are simply unable to afford the high housing prices, others consciously choose to rent forever. Whatever the reason for that may be, there is an apparent trend here and the term ‘generation rent’ encompasses the general explanation behind it.
‘Generation Rent’ as a Force of Circumstances
The pandemic has played its part in the state of the housing market at the moment. When we look back at the stamp duty holiday imposed during it, it certainly has brough a big success in helping people to afford their homes. The government had made great efforts in trying to turn ‘generation rent’ into ‘generation buy’ by putting schemes aimed at helping first-time homebuyers purchase their dream home, however, despite their sincere attempts, it has remained incredibly difficult to achieve that.
That is why the question of whether it’s this generation’s reckless spending and overpriced coffees are the reason why they won’t be able to secure their forever homes or is it simply a force of circumstances. With housing prices reaching record highs, mortgage rate rising to levels never seen before and inflation which has hit most parts of the world, it’s fair to assume that there are probably still a big number of Millennials or Gen Zadults who are saving and waiting for these difficult times to pass so that they could finally secure their forever home.
There are also people classified as ‘generation rent’ who need to shift their focus away from the big cities and look elsewhere for better deals on their houses. If you are looking to secure a place in London, for instance, it may be triple times harder for you to achieve that. While some stick with their location preferences, others are now realizing that in order for them to get on the property ladder, they might have to look away from large cities and make some compromises.
Having said that, it’s unfair to say that all of ‘generation rent’ has decided to rent forever or that they are completely unable to purchase properties. What’s closer to the truth is that there are exceptions, and many may still want to get on the property ladder but are sadly obstructed due to the force of circumstances nowadays.
‘Generation Rent’ and the Conscious Decision to Rent
The people who consciously choose to live in rented accommodation rather than buy their own homes are often referred to as ‘forever rent’ as well. In today’s turbulent times, people are now not only unable to afford housing, but they also may prefer to rent due to some of the benefits it brings. For example, one of the main reasons why people choose to rent forever is because of the mobility it gives you. Whether you decide to move home anywhere in the world, go live closer to family or downsize due to financial problems, when you are renting it is much easier to do any of these things in comparison to having to sell or buy properties.
Not to mention that it’s not only Millennials and Gen Z who purposefully choose to forever rent. There are now many retired and older people who decide to switch to rented accommodation as well. Their reasons are similar to the ones outlined above but normally high maintenance costs are the main initial trigger, making renting a much more attractive option.
Myth or Reality?
While ‘generation rent’ is a real thing and there are thousands if not millions of people who struggle to get on the property ladder and will most likely never afford to do so, there are still many options and support out there which aim to help those who still wish to secure their dream home and make it all a reality. Therefore, it’s false to say that it is one or the other, but rather a mixture of the two. Having that in mind, it’s comforting to know that even if you are classified as ‘generation rent’, there are alternatives and ways for you to get your dream home with a bit of effort and support.
This article was written by an online estate agent House Sales Direct. If you wish to sell house fast and for free, then head over to the House Sales Direct website for more property-related information and inquiries.