London families who are never able to get on the property ladder will be more than £1.3million worse off over their lifetime than those who can buy a home in their twenties, research reveals.
The Shelter study paints a bleak picture of the financial, social and psychological implications of England’s housing shortage.
By analysing the income of ‘first time flyers’ who have help onto the property ladder in their twenties, ‘first time triers’ who are only able to buy after years of saving, and ‘renting lifers’ who can never buy, the research reveals the enormous financial cost of being priced out of home-ownership.
Shelter chief executive Campbell Robb said: “The housing shortage is changing the face of our nation, with dramatic consequences for an entire generation finding themselves priced out and losing out.
“The failure of successive governments to build the affordable homes we need means that, for the first time in over half a century, millions of young people today face worse prospects than their parents.
“Everyone should have the chance of a stable future where they can put down roots, but for many the reality is a lifetime of frustration that they can’t move on in life, coping with expensive and unstable private renting, and feeling alienated from their friends who can get help from the Bank of Mum and Dad.
‘First time trier’ Robert, 36, has been pushed from one private rented home to another for the past decade.
He had no hope of saving for a home of his own until a family member recently offered cut-price renting rates to help him save for a deposit.
He said: “I had resigned myself to the fact that without a windfall I would never have a chance of getting on the property ladder.
“Renting has been a nightmare – I’ve not been able to stay anywhere for more than two years, and it’s been so hard to find somewhere close to work that’s affordable.
“Rent has eaten up most of my money each month so, despite living as frugally as possible, I’ve never been able to save anything significant.
“I’ve felt looked down upon because I’m not a homeowner and it’s even affected relationships with family and friends.
“I’m so lucky to finally have financial help from a family member to try and get a place of my own – I don’t know how anyone on a normal wage could buy without it.”
The study analysed a range of factors including house prices, rent, earnings, living costs and interest rates and revealed that those families that rent for life in London end up £1,361,000 worse off over their lifetime.
Aside from the blow to people’s wallets the study revealed the damaging social emotional impact of being priced out of the housing market.
These included less stable careers and relationships, feeling jealous of friends who had financial help to buy their first property and putting off starting families of their own.
Shelter’s Mr Robb added: “We need politicians to deliver a big and bold plan that will finally get to grips with our housing shortage, and put a stable future back within reach for both generation rent and generations to come.”
Picture courtesy of Images_of_Money, with thanks