Almost half of renters believe that nothing less than a substantial windfall will get them onto the property ladder.
36% UK households now live in rented accommodation, up from 31% in 2007. Figures from the Office of National Statistics show that the number of households in the private rented sector in the UK rose from 2.8 million in 2007 to 4.5 million in 2017, an increase of 1.7 million (63%) households.
Findings from a study be Aviva suggest that the rental trend could be set to continue, with many residents convinced that they will never become homeowners.
Almost half of renters (46%) say they would only be able to get on the property ladder if they inherited a property or the money with which to buy one.
Nearly two out of five (38%) renters expect renting will become the most common type of accommodation for future generations.
However, homeownership is still ingrained in the British psyche. Half of renters (50%) feel there is a stigma attached to renting rather than owning a home. In line with this, 22% say they feel ‘embarrassed’ to be renting, increasing to 33% amongst those aged 35-44 years.
Reasons for renting vary, but are mostly financial. Almost two thirds (62%) of renters say they are doing so because they can’t afford to buy, whereas 12% are renting while they save for a house deposit (rising to 28% amongst those aged 25-34). Although a small proportion (11%) say they don’t want the responsibility of being a homeowner.
Renters say that, on average, 35% of their income goes on rent while homeowners spend just 25% of their income on a mortgage. Those who rent privately will spend 40% of their income in accommodation.
Paul Brencher, UK Health and Protection Director for Aviva said: “More and more households are living in rented accommodation, as house prices continue to be out of reach for many. There are a number of benefits to renting – it provides flexibility and can allow people to have their own space sooner than if they were saving to get on the property ladder.
“However, renters have the same need to be able to pay for their housing as homeowners. The risk of an unexpected loss of income due to ill health, and the potential impacts for families, are the same for renters and homeowners.
“Our research suggests that many renters could be leaving themselves exposed because they don’t have protection insurance or cover for their possessions. Buying a home is often a trigger for purchasing life and contents insurance, so it’s important that people don’t miss this step, simply because they are renting. Whether buying or renting, we’d urge people to consider how they can protect their incomes and possessions, just in case the unexpected happens.”
