On average, a first time buyer in the city of London will have spent tens of thousands of pounds in rent before they escape the renting trap, according to new research.
The Association of Residential Letting Agents (ARLA) produced a report titled The Cost of Renting. It calculated the average amount that a person will spend on rent before buying for the first time across different areas of England.
On average, a renter in the country will spend £50,000, it is reported, while those in the city of London can expect to be looking at forking over £70,000.
The cheapest region to rent before being able to buy, it seems, is the north east, where £31,300 is likely to be sunk per household before they move into their own home.
Worryingly, it seems to be getting worse, as people leaving their childhood households this year will, according to ARLA and the Centre for Economics and Business Research, pay £64,400, over a fifth higher than current renters.
Similarly, renters moving to London are predicted to pay out £23,100 more than current renters, before they can buy their own property.
David Cox, the managing director of ARLA, said: “As rent costs continue to rise, unfortunately more and more tenants will find themselves renting for longer as they have less ability to save. We need to take action now, before we become a nation of forever renters.”
The renting trap, or ‘generation rent’ as it has been called, will continue to put pressure on the housing market. Less people able to buy means that building firms will have less of a reason to build more properties, and housing prices will continue to be high.
Meanwhile, it is a bad position for the people renting to be in, as that £70,000 will be money that they will never see again. At least when paying off a mortgage as a home owner, that money is being changed into an asset that can be sold later on.
Some government schemes are enabling individuals to get onto the property market by opening up the option of cheaper deposits, but the market itself is still very inhospitable.