Surely if you can afford to pay nearly £1,500 in rent, you can afford a mortgage? Well, yes, depending on the term, interest rate and so on, quite likely a mortgage of around £300,000. Yet around 35% of us are renting, rising to over 40% of 25-40 year-olds. So what’s the problem? Deposits and income levels. The old dilemma, if you’re renting and it’s costing you that much, how can you save? Few can and as a result it’s only those with generous (or, sadly, dead) parents who might have enough to put down. And even if two of you are on an above average salary, average being currently around £35,000, you’ll struggle to meet most lenders affordability measures. Will building lots of new houses in a field near you help the cause? Not for quite a while, I fear.
“Rental prices up 6.2% in 12 months to January – ONS”
The number of under-40s, in particular, renting without apparent hope of buying has risen by over 20% in the last 15 years or so, more than has been the case in other countries whom we would consider comparable with us: in the US, around 6%, Germany 8%, for example.
