First-time buyers will spend £90,000 on rent
Tenants who rent in London will hand over an average of £68,300 to landlords before they buy their first home.
And anybody in their early 30s who rents in London for the first time this year will pay out just over £90,000 by the time they can afford to buy a home, according to a report by the Association of Residential Lettings and the Centre of Economics and Business Research.
ARLA says the average first-time buyer will have spent 16.4% of their total lifetime earnings on rent before stepping on to the property ladder. And the generation after will spend even more.
The study reports that high house prices are shutting aspiring homeowners out of the market.
ARLA adds that first-time buyers are struggling to save a sufficient deposit, while those with savings may not get a mortgage large enough to buy a home, particularly in London and south-east England.
Private rents in England rose 2.5% over the year to December 2015, according to the Office for National Statistics, while pay excluding bonuses increased by 1.9%.
In London, private rents rose by an average of 3.9% over the year to December 2015 but pay growth was flat for full-time workers.
“The London rental market is competitive, with far more prospective tenants looking for properties than actual houses available,” says David Cox, managing director of ARLA.
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