Generational inequality forces generation to rent

June 19, 2016 by Brendan O'Neill

Landlords

According to a report by Civitas recently, older people:

“are making capital gains at the expense of their children”.

The study was the most recent to report that there is inequality between generations, as older home owners are benefiting from soaring property values and their children either struggle to secure large mortgages or pay excessive rent. Peter Saunders, the researcher from Civitas, stated that average earnings increased by 51% between 2000 and 2014. However, he added that the average price of a house has increased by 132%. He added:

“The result is that the younger generation is now expected to pay a much bigger multiple of its earnings to buy a home than their parents did- something that never happened previously.”

Proposed solutions provided by the think tank include the Bank of England ensuring that property prices remain in line with the average income. Another controversial proposal has been to permit private landlords’ tenants to buy the property they reside in, as the tenants of a property owned by the council are allowed to.

The government states that it commits to dealing with the younger person’s problem of unaffordable housing, which included recent tax changes to put off investors in buy to let and providing generous incentives for potential home owners who are struggling to save for a deposit.

Speaking to a mortgage adviser is often the best solution, as they are CeMAP qualified so that they have the relevant knowledge to help buyers at all stages of the house buying process.