The Millennials were born between the mid 1980’s and late 1990’s thus making them between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters who grew up with the newest tech and computers and who are huge aficionados of music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as Generation Rent, many Millennials have discovered that renting is a good choice for their shelter and accommodation needs without the hassle that comes from buying a home. Nonetheless, that is not the only reason they don’t buy property. When they should be concentrating on their profession, putting down roots and starting a family, Millennials are still going through the pressure and strain of student loan liabilities whilst, at the same time, finding it tough to pay rent.
The hot topic at the
moment is the cost of renting, as both political parties have seen mileage in
wooing these Millennial Generation Renters. The average rent in Huddersfield is
currently £816 per month making this a big-ticket item on the monthly budget. I
was inquisitive to find out exactly how much Huddersfield Millennials will
spend on rent by the time they reach their mid 30’s. The average age people
leave home in the UK is 22; so looking at a Huddersfield 22-year-old (or
Millennial) who left home in 2005 then between 2005 and today that Huddersfield
Millennial will have
shelled out £117,556 in rent.
It’s no wonder local
Millennials can’t afford to buy a Huddersfield home given their tremendous debt.
This means younger Huddersfield Millennials will probably carry on renting for
the foreseeable future, simply because the prospect of buying a home is not yet
achievable.. that is until you look more deeply at the numbers…
Looking at the chart
above, the average rent of a Huddersfield property in 2005 was £684 per month
(pm) … if it had risen by inflation,
today, that would be £964 pm. As I have already mentioned in the article, today
it only stands at £816 per month. Looking
over the last 12 years, adding up all the differences between what the average
actual rent was compared to what it should have been if rent had gone up by
inflation, the average Huddersfield Millennial tenant would have paid £129,374.
This means that an
average 35-year-old Huddersfield Millennial tenant, who has been renting since
2005, is better off by £11,818 when comparing the actual rent paid compared to
what it would have been if it had risen by inflation. In a nutshell, tenants
have done well due to the sub-inflation growth in rents.
In fact, if you recall I
mentioned in an article a few weeks ago, the older Huddersfield Millennials are starting to
use those savings and are gradually shifting towards home ownership. They are
finally catching up with the British homeownership dream as Bank of Mum and Dad
help with the deposit. Also, the scrapping of Stamp Duty from the Government
starts to kick in together with the realisation that if the 5% mortgage deposit
can be scrapped together (yes, 95% first time buyer mortgages have been
available since 2009), it is still a lot cheaper to buy than rent, meaning this
will unquestionably drive demand for Huddersfield homes for sale – good news
for Huddersfield homeowners.
… and
what does this mean for Huddersfield landlords?
Well
the vast majority of younger Millennials are still renters and I foresee this
to be the case for at least the next ten to fifteen years. Landlords will need to keep improving their
properties to ensure they get the best tenants and they will see a much higher
rent achieved. Millennials will pay top dollar for a top dollar property. It is important to do things correctly as
making money won’t be as easy as it has been over the last twenty years. With a greater number of properties on the
market .. comes greater choice. Don’t buy the first thing you see, buy with
your head as well as your heart … because as I promised a few weeks ago, the
first rule of Buy To Let Investment …..
“You are not going to live in the property yourself”
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