Soaring rents knock Gen Z out of the housing market

Gen Z are being “locked out” of home ownership, campaigners have warned, as first-time buyers now face paying up to six times more for a home than their parents.

- ALICJA HAGOPIAN DATA CORRESPONDENT

An analysis of rental, property and salary data by The Independent reveals that the average homebuyer in 1995 had to save just a third of their salary - £5,000 - to put down a deposit, while today's first-time buyers are forking out average deposits nearly twice as high as the average salary.

Land registry data in England shows that the average house price now costs £286,594 - nearly six times higher (£50,679) than three decades ago.

But the average salary has barely more than doubled in that time, from £15,034 to £37,430, while the upfront cash needed for a deposit is more than 10 times greater on average.

Rents are also soaring, with average monthly rates going from £1,025 to £1,343 in the past five years alone - a 31 per cent jump, according to the UK-wide private renters index.

"If the government does not slam the brakes on soaring rents, many may never be able to buy their own home," Ben Twomey, chief executive of the campaign group Generation Rent warned.

"Generation Z is Generation Rent. They are locked out of home ownership because they face higher rent costs than any other generation before them. Trying to save for a deposit to buy a home while rents soar is like pushing a boulder up a hill that keeps getting steeper and steeper."

Young people who have managed to save for deposits say they feel they have had to "sacrifice" a lot to do it.

"It's giving up your entire social life," said Paris, a 26-year-old living in London, who started saving to buy her own place after a break-in and safety concerns while renting.

"My mum asks me, 'What do you do, you just stay in all the time?' And I say, 'Well yeah, because we can't afford it!"

Even mortgage advisers admit that the challenges facing younger buyers are worse than in previous decades.