Educating the next generation
The term 'generation rent' is a familiar one, highlighting the struggles that millennials, and indeed many who are older than them, have had getting on the property ladder in recent years. However, the next generation may have some greater problems.
While the government has been achieving some success with its bid to raise the number of homes being built - the annual tally recently topped the 200,000 mark for the first time since the financial crisis - the reality is that getting on the property ladder may remain beyond many for a long time to come, meaning that youngsters growing up today may face the same prospects of renting for many years that millennials have.
They actually think that '
This may be of particular concern because new research by Halifax has suggested they have not been made aware of the realities of the UK housing market - either rental or for purchase - even as they are close to the age when many of them will enter it.
It may not matter quite so much that a fifth of youngsters aged between 11 and 14 believe the amount they could borrow to buy a house is unlimited, as there is still time for them to learn otherwise. However, there is a startling gap between perception and reality among those aged 18-21, a group who in many cases are already experiencing living away from the parental home in rented accommodation as students.
Among the common beliefs in this group was over-optimism about when they might own a home, with a third expecting to be on the housing ladder by the age of 25. A tenth of them think stamp duty is for the payment of stamps, so perhaps it is as well first-time buyers will no longer have to face this tax. Pity those who plan to buy in London, though, as a fifth of this age group think the average house price in the capital is between £50,000 and £200,000.
In the latter case, it may be most of those thinking this way live far from the metropolis, but they will be in for a shock if they think they can easily find a house anywhere for £50,000.
A job to be done
Commenting on the findings, managing director of Halifax Russell Galley said: "Despite being one of the most important financial decisions we're ever likely to make, becoming a homeowner feels like a mystery for Generation Z who will soon be thinking about flying the nest."
He added that "there's clearly a job for all of us to help kids get a better idea of what’s involved with taking the first step on to the property ladder".
Implications for the rental sector
However, it is not just the market for buying and selling that will be affected if such ignorance is allowed to persist unchecked. If youngsters know little about buying, it logically follows that they probably have low levels of awareness of what renting involves either, from the cost involved, the need for deposits, different kinds of tenancies and their legal rights and responsibilities.
This being the case, it may fall to landlords and letting agents with young tenants to provide them with as much information as possible at the outset to make them aware of everything that is involved.
All this could be highly beneficial to both parties, as it could avoid a whole range of problems ranging from non-payment of rent through to unauthorised property alterations by residents acting as if they were owners.
The next generation will also, to a large extent, be generation rent, so knowing what this involves will be crucial to helping them navigate through the realities of housing in 21st century Britain.