Soaring rents coupled with the high cost of having children is making it difficult for young families to survive in today’s rental market
The cost of having a child or children is never cheap. Paired with the soaring price of rent across the UK, young families are increasingly being priced out of the rental market.
According to a study by the Guardian, this is something that is becoming unaffordable for young families in two-thirds of the UK. Living in cities like Birmingham, Edinburgh and the south-east England are hindering young couples from having children because of the high proportion of their wage they are paying to their landlord.
The study, which was in conjunction with Generation Rent, revealed that young couples would have to spend more than 30 per cent of one full-time earner’s wage to keep a roof over their head in a staggering 66 per cent of the UK.
Young couples in their 20s wanting to start a family in London would have to be prepared to pay 60 per cent of their income on rent, while couples in their 30s would have to pay 44 per cent.
This means that young families are increasingly being unable to rent in these areas, pushing them to relocate to more affordable regions like the north west, north east and Yorkshire and the Humber.
When we look at the long-term history of UK housing, in 1990 some 39 per cent of 20-24 year olds bought their own home, and in 2015, only ten per cent of the UK population were able to do so. This is somewhat linked to the soaring prices of houses and inability for wages to keep pace.
In March, the Office for National Statistics (ONS) published data that revealed average earnings from 2011-16 have grown by nine per cent, while the average house price soared by 26.7 per cent. As a result of this, the number of years’ wages required to afford the average property has increased from eight years to over nine.
Betsy Dillner, director of Generation Rent, commented: “For people on modest incomes, having a child will normally involve one parent staying at home while the other works full time, for a period longer than parental leave normally covers.
“That means a typical new family will rely on one full-time salary to make ends meet. If the rent is too high, that makes the arrangement unviable.”
Soaring house prices in the UK mean that young first-time buyers are having to seek financial help from their parents to get on the housing ladder. The Guardian’s report found that by 2029, on current trends, parents will be helping with 40 per cent of transaction by 2019.
However, the growing prevalence of parents in home-buying could entrench inequality, with only those who already have a level of wealth able to purchase.
This article has been provided by Experience Invest.