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Can Millennials Afford to Buy a Home?

17 April 2020 at 00:00

‘Millennials’, it’s a controversial term – but, in literal terms, refers to people born broadly between 1981 through 19961. It’s remarkable how polarised the perceptions of other generations have towards Millennials. Some, with sympathy, refer to them as ‘the lost generation’2 – when it became likely that, due to entering the workforce during ‘The Great Recession’ that began in 2008, Millennials may be one of the first generations in a century to never reach the wealth and security levels that their parents enjoyed. So, when we talk about property security – can the overwhelming majority of Millennials ever realistically aspire to own their own home in some of the most prosperous cities in the Kingdom?

Generation Rent

Rents in London (metropolitan and greater London) are high. The following figures are estimated averages:

  • The Average Rent for a studio (S) and one-bedroom flat (1B) in London – High End*3
    • S - £1679.60 PCM
    • 1B - £2350.40 PCM
  • The Average rent for a studio and one-bedroom flat in London – Low End**3
    • S - £615 PCM
    • 1B - £755.80 PCM

The average salary in London is £36,0004. After-tax, that’s £2,322 a month, and £2,258 if you’re repaying a student loan.5 Paying anything but the lowest rates in London and still eating, assuming you’re on a salary even close to the average, and being able to save enough for a deposit for a home is a herculean task. Hence the term, Generation Rent.

Generation Guardian

Whatever you may think about the state of the property market in London or other major cities, there is a rapidly growing guardian property services industry in the UK that is actively looking for live-in caretakers as well as young professionals who want to trade responsibilities for taking care of an otherwise vacant property, in exchange for hugely reduced rent.

Live-in Guardians (LIG) is one of the leading property guardian companies in the UK, and we’ve helped thousands of Millennials save huge amounts of money on their living costs while helping many great buildings in our major cities keep safe and secure. With those reduced living costs, millennials will be able to set aside money for a housing deposit for as long as they need to – evading many of the challenges that are leading some pundits to predict that a third of Millennials will be renting well into retirement. We don’t want that to happen.

With Live-in Guardians we’re helping keep properties safe and secure and enabling aspirational young people a fighting chance to realise their dreams. To find out more about Live-in Guardians, click here – and to find out about saving huge amounts of money on rent, learn more here.

 

* ‘High end’ defined by averages in London postcodes EC2Y, W1U, SW1W, SW7, W8
** ‘Low End’ defined by averages in London postcodes CR8, RM8, SM6, SE25, IG3

[Sources]

[1] Strauss, William; Howe, Neil (1991). Generations: The History of America's Future, 1584 to 2069. Harper Perennial. ISBN 978-0688119126. p. 335

[2] https://www.businessinsider.com/1980s-millennials-wealth-the-great-recession-2018-5?r=US&IR=T | Retrieved 05/04/2020

[3] https://www.simplybusiness.co.uk/knowledge/articles/2019/09/average-rent-in-london-guide-for-buy-to-let-landlords/ | Retrieved 05/04/2020

[4] https://www.moneysavingexpert.com/tax-calculator/ | Calculated on 05/04/2020

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