Generation Guppie: A growing number of young adults are giving up on owning a home.
42% of adults aged 18-39 who don’t own a home say they’ve given up on the idea of buying one in the next ten years, including 38% of those earning £60,000+.
More than four in ten (42%) British adults under the age of 40 who do not currently own a home are now ‘Guppies’ – young people, many of whom have professional careers and big salaries, who have ‘Given Up on Property’.
The Guppies of today are in stark contrast to the ‘Yuppies’ of the Eighties and Nineties – young urban professionals with a good salary and no issues buying a home.
Our latest survey of 2,000 adults under the age of 40 reveals that even among those earning over £60,000 per year, 38% have given up on affording a home in the next decade.
Overall, just one in five (21%) say that they will ‘definitely’ be able to afford a home in the next decade, while 14% are currently planning to buy one, or are in the process of doing so.
The vast majority of Brits under the age of 40 in the UK do not already own a home – just 22.5% of those aged 25-34 and 1.4% of those aged 24 or under do.
In fact, non-home-owning under 40s in the UK are now more likely to be living with their parents, than be planning to, or be in the process of, buying a home (14.4% vs 14.1%).
Those who have given up on a home in the next decade cite 3 main reasons:
-
the cost of living crisis (64%)
-
increasing house prices (51%)
-
higher mortgage rates (49%)
Of those who are planning to buy, or who are in the process of buying their first home, 85% say they have made financial sacrifices to do so.
Over a third 34% have given up holidays, and 30% have had to give up socialising.
A quarter (25%) have stopped saving for their future and one in ten (10%) have even given up dating or being in a relationship in order to afford a home.
Younger people adjusting expectations to get on the ladder
Younger people can get on the housing ladder but many need to make compromises in order to do so.
Among those under 40 who are currently planning to buy, or who are in the process of buying their first home, seven in ten (69%) say they made compromises on the property.
Most common were ‘not being able to buy in the area they’d ideally like to (31%), not being able to buy a home in as good condition as I’d like (18%) and being unable to afford any spare rooms’ (17%).
Many also look to alternative locations. Just 33% of all under 40s who don’t currently own a home say they’d be able to afford to buy a property where they currently live - but 23% say they might if they were to move further away.
Location is the key
Among those who say they might be able to afford a home if they moved to a different location, they’d on average have to move around 37 miles. As such, investigating new areas may be the key to homeownership for many.
In adulthood, many move away from where they grew up. But for some, moving back could help.
Overall, 37% say that they’d be able to afford to buy a home in the place where they grew up. However, this rises to nearly half (49%) in Scotland and 45% in Yorkshire and the Humber.
Those in the South of England are less likely to be able to. Just 27% in the South West and 33% in the South East say they could afford a home where they grew up.
The ‘alternative’ ways Brits are considering to get a home
Many young adults today are open to less conventional ways of getting on the ladder.
Nearly a third of under 40s who don’t currently own a home (31%) would be open to a part ownership or help to buy type scheme, and 18% would be open to buying with a friend, colleague or sibling.
Many are also up for getting their hands dirty - a fifth (20%) would be open to buying a near-derelict home and doing it up whilst 19% would even consider building a home themselves.
Seventeen percent say they would be open to moving to a cheaper area and working remotely.
What can I do to get onto the property ladder?
1. Find out what you can afford
Use our mortgage calculator to find out what you could afford based on your income to get a starting point for your search.
2. Be area-agnostic
Most people in the survey say they can’t afford to buy a home where they live or where they grew up, so the reality for many is that they’ll need to look at alternative locations.
3. Look at the help available
There are many schemes out there designed to help people get on the ladder. Shared Ownership schemes (where you own part of the home and pay rent on the rest) can be a great way to get a foot on the ladder.
Meanwhile 95%, mortgages can help make saving the deposit less of a barrier.
4. Don’t go it alone
Buying with a friend or a partner is one way to slash costs significantly and pool your salaries together.
It may feel risky, but it’s actually very straightforward to get a legal document drawn up to enshrine what your share of the property is.
5. Get the right mortgage
Many people will have seen worrying news reports about huge increases in monthly mortgage costs - in fact 18% in the study said they’d be too worried to take out a mortgage.
However, there are a number of options so it’s vital to choose what’s right for you.
For example, a fixed mortgage reassures you of what your monthly mortgage payments will be for a set period.
Free online mortgage brokers such as Mojo can help here, by looking for the best options for you.
Key takeaways
- The cost of living crisis is now the key barrier to purchasing a property for young people - with higher mortgage rates also having a strong impact
- Non-home owning under 40s are more likely to be living with their parents, than planning to buy a property
- But many are looking to ‘alternative’ ways to get on the ladder - from moving away from where they currently live to buying with friends, getting a ‘doer upper’ or even building their own home
Is it cheaper to rent a home in the countryside?
Generally, it is cheaper to rent a home in the countryside than in the city. This is because there is less demand for rental properties in rural areas, which means that landlords can charge lower rents. Additionally, the cost of living in rural areas is also lower, which can further offset the cost of rent.
However, the trend of renting in the countryside has been changing in recent years. During the COVID-19 pandemic, many people moved out of cities to the countryside in search of more space and a better quality of life. This increased demand for rental properties in rural areas led to higher rents. However, as the pandemic has subsided, some people have started to move back to the cities. This has led to a decrease in demand for rental properties in rural areas, and rents have started to become more affordable again.
Summer is one of the busiest times of year in the rental market.
And demand for new rentals this year is now even higher than the same time last year.
Meanwhile, the supply of homes to rent is only slightly ahead of last year’s levels.
That means the supply-demand gap for the rental market is continuing to put pressure on rents.
And as demand increases, so do the prices.
Our rental index of new lets shows that the average UK rent increased by 0.9% over June - the highest monthly increase since October 2022.
The average UK rent has now reached £1,163, which is £110 higher than a year ago.
Rents in urban areas rise faster than rural areas
A new trend is emerging in the rental market: rural areas are becoming more affordable than cities when it comes to new lets.
Rural areas are built out of Census output areas defined as those with a population of less than 10,000. They can include isolated dwellings, hamlets, villages and small hub towns.
Urban areas are built out of Census output areas that tend to have a population of 10,000 or more and include cities, towns and suburbs.
In England, the average city rent in major cities reached £1,300 in June, while in the countryside it remained £220 lower at £1,080.
The lettings market in UK cities is prone to seasonal summer spikes in rental inflation as demand from students, graduates and relocating families grows over the summer.
In recent months, some of the largest UK cities have experienced above national average inflation of more than 10%.
However, rural rents are now growing at a slower pace.
Over the last 12 months, rents in the English countryside increased by an average of 6.6% or £67 a year.
This new trend marks a reversal of what happened during the pandemic years of 2020-21, when rural rental properties were in hot demand.
The reopening of cities in 2021 has seen renters returning to urban areas. And by June 2022, their regained popularity led rental inflation in cities to exceed that of their rural counterparts.
Rental affordability in cities has become increasingly challenging.
Conversely, the average proportion of household earnings needed to rent in the countryside has stayed broadly the same over the last 12 months.
Having said that, this won’t be a universal experience of all renters in rural locations.
Some 2 out of 5 rural areas saw rental inflation rise above the national average wage growth (6.9%).
And renters in some rural areas are now having to put a higher proportion of their income towards housing costs.
8 UK cities where rents are rising fastest
| City | Average rent | % increase | annual increase pcm |
|---|---|---|---|
| Edinburgh | £1,136 | 14.2% | £140 |
| London | £2,005 | 13% | £230 |
| Manchester | £983 | 13% | £110 |
| Glasgow | £871 | 12.9% | £100 |
| Southampton | £1,052 | 10.9% | £100 |
| Cardiff | £1,031 | 10.9% | £100 |
| Birmingham | £865 | 10.2% | £80 |
| Nottingham | £899 | 10.1% | £80 |
Rental Market Index
In June, we identified 8 major UK cities where the prices of new rents increased by at least 10% in one year.
In Edinburgh, London, Manchester, Glasgow, Southampton and Cardiff, the cost of a new let rose by £80 pcm or more.
Top of the list was Edinburgh, where the average monthly rent for a new let in the city rose by £150 pcm, pushing the average rent close to £1,200 per month.
Manchester and Glasgow were next, with rents increasing by £120 and £100 pcm respectively.
Meanwhile, renters in Liverpool, Sheffield and Belfast saw the lowest rental growth among the largest UK cities.
In these locations, average monthly rents increased by less than £60 in the last year.
Cheaper urban areas to rent
While most renters across the UK saw steep rental increases in the last 12 months, there are a few exceptions.
When considering the UK’s largest urban areas, there are three towns where rental inflation was below 5%.
Annual rental increases in Blackpool were the lowest among all UK cities and large towns, with average rents increasing by £20 on average.
Blackpool is followed by Doncaster and Grimsby, both in Yorkshire and the Humber, where rent increases over the last 12 months were £30 and £20 respectively.
All three areas are among the least expensive large towns to rent in the UK.
|
Town |
Average Rent (PCM) |
Annual rental price change (%) |
Annual rental price change (£) |
|
Grimsby |
£579 |
4.7% |
£30 |
|
Doncaster |
£644 |
3.8% |
£20 |
|
Blackpool |
£651 |
3.2% |
£20 |
Rents rise fastest in London and Scotland
Scotland and London - the two largest rental markets in the UK - are experiencing the steepest growth.
In Scotland, rents increased by £80 per calendar month (or 13.1%) on average in the last 12 months.
In the Scottish Borders area of Tweeddale, the monthly cost of a new let increased by 17.1% - or £80 pcm.
In London, rents have risen £230 (or 12.7%) in the last year. That’s actually down from an annual rise of £273 (or 17.6%) in the 12 months leading up to June 2022.
The fact that rental inflation is coming down in the capital now suggests affordability is stretched in London, with less headroom for rents to grow further.
In reality, there is a lot of variation in how fast rents are going up in different London boroughs.
For the fifth month in a row, rents in Newham are growing faster than anywhere else in the capital (16.5%), whereas the lowest rental inflation is currently being seen in Kensington and Chelsea (11.0%).
Slower rental growth in Northern Ireland and South West England
Our data shows the lowest rental inflation is happening in Northern Ireland (4.3%) and the South West (7.7%).
Northern Ireland is currently among the regions with the lowest earnings growth in the UK, which limits how much rents can increase.
Meanwhile, demand for rentals in the South West has slowed down from the pandemic peak of 2021 and it has been lagging behind other UK regions since October 2022.
This has eased the pressure on rental inflation in the region, particularly in the more rural areas.
Key takeaways
- Rents in cities are now rising faster than in rural areas
- In 8 UK cities, rents have increased by more than 10%. In Edinburgh, rents are up 14%
- However in rural locations, rents have increased by 6.6% - or £67 on average
- The average monthly UK rent reached £1,163 in June, which is £110 higher than a year ago, with London and Scotland seeing the greatest increases