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First Time Buyers have blown £50,000 in rent

house cloud in hand
house cloud in hand



The average person buying their first home this year will already have spent an incredible £52,900 on rent - that's 16.4% of their total lifetime earnings. And things are set to be even worse for those who have just started renting this year.

The research, by the Centre for Economics and Business Research and the Association of Residential Letting Agents, found that those who have just started to rent their first property will end up spending a shocking £64,400 on rent by the time they can afford to buy a place of their own.

The figures are based on the fact that the average person who moves out at the age of 18 will typically rent for 13 years before they can afford to buy.

The overall figures hide some shocking regional figures. The lowest lifetime rent is in the North East - where people have spent £31,300 by the time they buy a home of their own. In the South East that rises to £55,900, and in London it stands at £68,400. Those renting for the first time in the capital this year may be shocked to learn that they can expect to spend £91,500 on rent before they can afford to buy.

Why?

It perhaps shouldn't come as such as shock that the total cost of rent is so astronomical, as on average people in the UK spend 22% of their wages on rent - and in London they spend 30%.

David Cox, managing director, Association of Residential Letting Agents (ARLA), says "The rising cost of rent in this country is a huge issue, and is preventing tenants from being able to save to buy a home. Our Cost of Renting report reveals that tenants are already spending a significant proportion of their income on rent, and therefore struggling to save any money."

He warns that things are only going to get worse, pointing out that: "As house price affordability worsens and interest rates start rising, more pressure will be put on renting with weekly rent likely to rise, so home ownership will remain out of reach for many."

In fact, the study found that a fifth of people who are currently renting don't expect to ever be able to afford to buy a home - especially as house prices rise into the stratosphere and wages remain stubbornly low. Half of renters say saving for a deposit is their biggest obstacle to home ownership, while a quarter say they won't be able to afford the mortgage and a quarter say they can't stretch to the associated costs of moving - like stamp duty.

Most renters are deeply unhappy with the situation. Some 38% resent spending income on rent that means they cannot save for a deposit, while 25% think the government isn't doing enough to help them.

What can you do?

It's easy to feel you are between a rock and a hard place when you're saving for a deposit and paying the rent at the same time. There will be some people who can find a little wiggle room in their budget and make sacrifices from the first day of renting in order to put enough cash aside to raise a deposit over the years.

Many, though, will need to find an alternative solution. In many cases the difference is made by parents offering a loan to their grown-up children - or a gift - to cover the deposit and get their children on the housing ladder.

In other cases, their parents cannot stretch to a loan, but will let their kids move back home for a few years while they save the money that would have gone on rent.

There are several examples of young people making major sacrifices in order to save a deposit. One blogger moved back home and implemented radical lifestyle changes including giving up public transport, ditching buying presents, giving up most of her new clothes, and refusing to go out when it cost money.

A few years ago it emerged that one woman had been living in a shed her parents' back garden while she saved for a deposit (although the council deemed it unsuitable and eventually forced her to move out).

But what do you think? Should people have to go to extraordinary lengths to buy a property? Should they resign themselves to a lifetime of renting, or should the government be doing something to help? Let us know in the comments.

Is Britain Too Obsessed with Home Ownership?
Is Britain Too Obsessed with Home Ownership?