Studies show that as many as one-third of millennials (those aged 24-39 as of 2020) will never be in a position to own their own home which will see them forced to rent – a further 1/2 will be renting well into their forties.
A Vicious Cycle
This has seen this group also named “generation rent” due to their inability to save enough money to be able to afford a deposit, largely due to the fact that they are stuck paying high rental prices. This is a vicious cycle and one which can be hard to break for many.
Perks of Renting
While this is a big issue for many of this age group and a large percentage would prefer to get a foot on the property ladder, there are also many that actually prefer to rent instead of buy. This is for a few different reasons, including the freedom and flexibility that renting can bring, with the ability to easily move home at the end of a tenancy agreement and even go off travelling in between rentals. It also makes different areas more accessible and allows this group to never have to make a large financial commitment to just one place.
In addition to this, a large percentage of generation rent are also shouldering student loans so the idea of adding another large debt can be a deterrent. Another common reason is that home maintenance is not an issue as it is down to the landlord to handle repairs and utility expenses. While some homeowners enjoy maintaining their own home, there are also those that prefer to leave it to someone else.
The Car Market
Interestingly, it seems that it is not just homes that generation rent tend to favour. You will also notice an increase in car rentals over the years and this can bring many of the same benefits. When someone arranges a lease from somewhere like ZenAuto, it is less of a commitment and allows the individual to change to a new car every few years.
Not only this, but as the individual is never the owner it also means that they do not have to worry about selling the car and the depreciation hit that this can bring. There is not a huge amount of difference in price when it comes leasing and buying a car so it is clear that, for many, it is the lifestyle that this can provide which is attractive.
Generation rent may be stuck in a difficult situation but for many it can provide a less committed and flexible way of life that works well for them so there is a large percentage that will not be too concerned about never owning a home and this also extends somewhat to the car market with the increase in leases over the years.
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