Young South Londoners Renting, Buying reserved for the Wealthy!

 

The landscape of the UK housing market is undergoing a significant shift, increasingly favouring older and wealthier homeowners. This leaves young people, including those in South London, with dwindling prospects for homeownership. In this blog post, we delve into these dynamics, and what it could mean for young South Londoners eyeing the property market.

The Dominant Drivers

Data science firm Outra reports a concerning trend: the UK's housing market is rapidly becoming a domain for the old and affluent. According to their research, the cost-of-living crisis coupled with high interest rates and escalating house prices are impeding younger generations from advancing on the property ladder.

A Spike in Median Age

Outra’s findings indicate that the median age of individuals planning to move homes within the next six months has increased by 3.5 years over just one year. This shift brings the median age to 52.5, up from 49 years last year. This suggests that younger households are increasingly unable to make the move, literally and metaphorically, towards home ownership or better rental conditions.

Equity Over Income

The research points out that older households, particularly those above the age of 55, are the driving force behind this trend. These households usually have significant equity in their homes, enabling them to dominate the housing market. In fact, households with more than £250,000 in stored equity now make up 52% of those most likely to sell, a substantial increase from 34% a year ago.

Generational Wealth Over Current Earnings

Interestingly, stored equity seems to be a more significant factor than annual income when considering moving houses. People earning above £50,000 a year are only slightly more empowered to move than last year, making up 35.5% of the total, compared to 30% the previous year.

The Rise of the 'Inheritocracy'

Giles Mackay, the founder of Outra, warns that these trends could herald the rise of an "inheritocracy." Older generations are primarily moving to release equity for retirement or to aid their children's entrance into the property market. This creates a skewed market where the younger generation's ability to own a home heavily relies on financial assistance from parents or other family members.

Local Impact on South London

For younger residents in South London, this means that unless they can tap into "the Bank of Mum and Dad," their options are becoming increasingly limited. Whether it’s striving to own a home or seeking more favourable rental terms, the market appears stacked against them.

Conclusion

These trends are reshaping the UK housing market into an arena increasingly reserved for older, wealthier individuals. This poses challenges for younger generations, particularly in areas like South London where property values are already high. In this evolving scenario, it's crucial to keep an eye on market trends and seek professional advice to navigate this challenging landscape.

Stay tuned for more insights into the South London property market, particularly as they relate to younger residents aiming to make a mark in this competitive arena. Also, drop me a line and pick my brains or use my free online valuation tool to get a ballpark figure!