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Renting versus home ownership

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In recent years, it has become increasingly difficult for young people to take their first steps on the property ladder. Challenging economic conditions have forced many to stay at home with their parents or rent for longer. And yet, our research showed the struggle hasn’t put them off – they do still aspire to own their own home.

In fact, our findings suggested the majority of British, Canadian and American Gen Z respondents intend to buy their own property between the ages of 26 and 35. This is particularly the case in the 26 to 30 year-old age bracket.

It also extends to a country that has one of the lowest home ownership rates in the developed world. 76% of Germany’s Millennials and Gen Z respondents said they are planning to buy at some point. (In Germany, tenants stay in their rental accommodation for an average of 11 years, compared with just 2.5 years in the UK.)1

However, it won’t be easy for young people to achieve their goal. A recent report from a leading think tank suggested up to one in three Millennials in Britain may never own their own home.2, 3 In Canada4, at the age of 30, people are half as likely to be homeowners, compared with Baby Boomers at the same age. In the USA, new data show a slight increase in home ownership rates for under 35s. (36% in 2018 compared with 35% a year earlier.)5

Source: Better Homes and Garden Real Estate, November 2016


In the years since the global financial crisis, increasing house prices, especially in big cities, tougher mortgage requirements and low wage growth have made it hard for young people to buy their first home. In the UK and USA, more people are renting now than at any other time in the past five decades.6 In Canada, 76% of survey respondents who said they plan to buy in the next five years haven’t yet started to save or have managed to set aside less than a quarter of the money they need.7

But is renting all that bad? A recent survey of flatmates in London and New York (NYC) looked at just how much of peoples’ pay is being spent on accommodation.8 In London, the average monthly cost of renting a room is around £748 – or £1,608 for a one-bedroom flat. In NYC it’s even more. The average room cost is £973 a month – or £2,166 to have a one-bedroom flat to yourself. In the USA, utility bills and food were also more expensive. But salaries were higher – just over £55,000 a year in the Big Apple compared with around £35,000 in London.

So with cheaper accommodation and a lower cost of living, can young Londoners still save for that all-important deposit? Not always. Fortunately, some parents are stepping in to help. In the mid-1990s, around one in ten first-time home buyers in the UK were getting help from their parents. By 2005, the figure had increased to 25%, and it has risen to as much as 75% since the economic downturn.9


Source:, April 2017


1. The Progressive Policy Think Tank – Lessons from Germany: Tenant Power in the Rental Market
2. Resolution Foundation – Home Improvements: Action to Address the Housing Challenges Faced by Young People
3. Resolution Foundation – The Real Barrier to Millennials Owning a Home is Not the Mortgage – It’s the Deposit
4. Huffpost – Hey Canadian Millennials, Here's Proof you missed out on Buying a House, January 2018
5. – Millennials Are Out of the Basement and Into Buying Homes
6. Financial Times – Generation Rent and the end of 'forever furniture', April 2018
7. Cision – Canadian Millennials dream of being homeowners but most aren't planning for it: CIBC Poll, April 2018
8. – London vs New York: Which is the Best City to Rent In?, April 2017

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