Generation Rent is transforming the British housing landscape, and the latest figures confirm an increasingly bleak future for people who are trapped in rented homes by high prices and unattainable mortgages.
The charity Shelter has revealed that the average London tenant is now paying 59% of their earnings on nothing more than paying their rent.
Beth King and her family are trapped in Generation Rent. Their dream of buying a home is impossible, even though they have a family income of about £80,000 a year.
They cannot save the large deposits now demanded by mortgage lenders when they’re paying £1500 a month in rent for their two-bed home in Middlesex.
And, if they were able to spend that rent money on an interest-only deal, they would be able to afford a mortgage of £600,000, far more than the value of the home they’re currently renting.
Generation Rent is a hangover from the credit crunch. Before, mortgages were relatively easy to get, some might say too easy. But now borrowers need to have considerably bigger deposits to get a mortgage. That’s forcing many more to rent, and that increased demand has, in turn, pushed rental prices up to record levels.
There are seven million people living in rented homes who actually want to buy one of their own. And with high rents often making that an impossibility, one couple has found an imaginative way to escape Generation Rent.
Stacey Drinkwater and Dan Martin-Bond couldn’t afford to buy or even rent, so they created their own home…. an old double-decker bus, with a million miles on the clock, bought off eBay.
But Generation Rent and the associated huge demand for somewhere to live, is good news for property investors. And after years of recession, they are eyeing up the return of strong buy-to-let profits.
Generation Rent: Tonight is on ITV1 at 7.30pm