Flat sharing websites which have typically catered to students and millennials have seen an unexpected rise in the over 40s house sharing market. In the last five years, flat sharers between 35 and 44 searching for flat mates has risen by 186%, according to Spareroom. Likewise, the number of sharers aged 45 to 54 has risen by 300%.

Research shows, since 1998 rent prices have more than doubled compared to living costs, according to the Office for National Statistics (ONS). This, alongside soaring house prices means more of us are renting in to our 30s, 40s and beyond, compared to previous generations. In fact, by 2020 it is estimated that half of all under 40 year-olds will be living in rented accommodation.

Are baby boomers to blame?

Renters do not have the same advantages as their parents did, with Civitas directly claiming “baby boomers are making capital gains at the expense of their children”. Meaning millennials are being forced to pay high rent prices and mortgage costs, with older property owning generations making gains from rising property prices and yields.

Since 1995 private renters aged 16-24 has dropped from 20% to 13% of the total rent base, which suggests they are choosing to live with their parents for longer. Owning a house had seemed increasingly out of financial reach for a lot of younger people, but now simply renting one appears to be as well.

Matt Hutchinson from Spareroom said that the most common reason why people in their 40s are still sharing is simply because they cannot afford to get on to the housing ladder.

Where is everyone going?

With the average age of buying your first home increasing, as is average rents which means people are finding it increasingly difficult to save for a deposit. According to research by the Post Office, 1 in 4 respondents doubted they would be able to save for a deposit on their current income, and 17% thought they would lack the ability to meet mortgage payments.

Those hoping to buy or rent in London face an even bigger challenge, with London rent prices rising at an even faster rate and travel costs also increasing, making it ever harder for potential buyers and renters. This leads to an ever deeper spiral of rising costs and rising rents which pushes people further away from saving and owning their own home.

Local Authority Proportion of salary spent on rent
Westminster 86%
Camden 71%
Hackney 70%
Islington 69%
Brent 66%
Barnet 60%

 

Campaign group, Generation Rent, claim that if rent prices had risen with inflation then media rent would be much lower at £98.28 per week compared to £128, saving the typical renter £1,546 per year.

Are building more homes the answer?

Sajid Javid blames the problem of a “broken housing market” on too few new builds in densely populated areas such as London, and Manchester. However, there are opportunities to build new homes that can cater to the growing diversity of the UK housing market.

For example, the Olympic village was originally build to house athletes during the London 2012 Olympics, however it is now known as the East Village and owned by a group of international financial institutions. In the East Village, only about 10% of tenants are families and the rest are mostly millennials in singles, couple or flat-shares, according to the development manager – Get Living London.

These newly designed builds provide millennials with the opportunity to rent, but whilst also being part of a community with people in similar living circumstances. Rents begin at £345 per week for a studio stretching up to £775 a week for a 4-bedroom fully furnished townhouse.

At the premium end, some developers are offering all-inclusive rents including access to gyms, libraries and entertainment, including full-time staff organising activities for tenants. Get Living has adopted a policy of allowing independent bar, restaurants and retailers only in the development. This has become very popular with some that companies such as Deloitte pre-booked rental homes in the East Village for more than 40 of its graduates.

Some residents would suggest that while owning one’s own home is desirable, the quality of the housing available to renters is increasingly improving and comes with a level of flexibility that would be difficult to achieve if they owned their own homes.


Also published on Medium.