‘Generation rent’ is something of an overused cliché these days, and that’s probably why we very scarcely hear it anymore after what felt like an eternity of media coverage about it.
That being said, those people that are captured within its definition haven’t changed, and they haven’t shrunk as a group. In fact, they’ve grown.
One further aspect that must now be taken into consideration when having this discussion is that we now need to factor in the long-term impacts of the pandemic on people’s wealth.
If anything, UK household wealth has actually increased by 0.4%, however, one of the big problems facing the government is that the wealth increase across the UK hasn’t been re-distributed evenly and has increased a wealth gap between those who were secure, and those less secure.
Of course, the pandemic has been an unprecedented economic time, and this may not last, however, what seems to be increasingly clear is that those who are renting now are unlikely to suddenly become home-owners en-mass any time soon.
According to statistics from the government’s resilience survey, as reported by Property Wire, the difference between lower income renters, and mortgage payers who were struggling financially, has widened significantly during the pandemic.
Quoted in the article, Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The pandemic has dragged hundreds of thousands of people the wrong wide of the resilience gap, and renters, self-employed people, lone parents and furloughed workers have been hit particularly hard.”
She added: “Overall, more households have savings than before the pandemic, and 13 per cent of people have been in a position to actually put more aside, but those in full time employment and people who own a house with a mortgage are much more likely to fall into this bracket.”
The future of property
This report is adding to a growing body of evidence that the pandemic has heightened a well-known issue, in that the number of new buyers, and first time buyers, are decreasing as time goes by.
This, in turn, is meaning a huge growth in demand for private rented property across the UK, but with the supply unable to keep up with the demand.
Consequently, it’s driving up prices in this type of property, and despite developers building as quickly as possible, they’re struggling to meet this growing demand.
What that does mean, however, for UK property investors, is that they’re likely to see a steady but significant increase in their property yields as time goes on, and that’s unlikely to slow down in at least the next decade, if not longer.
Already considered one of the safest investments in the UK, we could yet see even more demand from landlords for UK Buy-To-Let in the coming years, and now could be a good time to consider investing further.