Demographic changes affect rental market
- 10th September 2008
- Renting Property News
Key demographic trends mean prospective first-time buyers will remain in the residential rental market for longer periods.
According to ludlowthompson.com, the trend for people to marry and have children later in life should delay the trigger points at which renters feel it is necessary to finally “settle down” and buy a residential property.
The Office of National Statistics figures show that the age at which people are marrying has increased by 24% over the last 20 years from 24 in 1987 to 30 in 2007. The average age of mothers giving birth outside of marriage has increased by 12.9% over the last 20 years from 24 to 27 years in 2007. However, the average age of first time buyers has only increased by 7.4% to 29 over the same period.
Stephen Ludlow argues that the average age of first time buyers has been kept artificially low over the last few years as house price inflation made buying a home as quickly as possible seem a “no brainer”. Stephen Ludlow suggests that now that house prices have weakened peer pressure to move from renting to becoming an owner occupier has waned.
Says Stephen Ludlow: “Changes in society mean people are ‘settling down’ later in life which should delay the need to leave rented accommodation to buy a fixed family home.
“Renting is also favoured by ongoing changes in employment patterns. People change their location of work and their employer far more frequently than they used to which puts a premium on geographical mobility. With stamp duty as high as it is renting is a cheaper way of providing that mobility especially in the early years of someone’s career.”
ludlowthompson.com point out that the impact of the credit crunch on lending to residential property developers also means that over the longer term the pipeline of new build properties coming onto to the rental market should begin to dry up.
People change their location of work and their employer far more frequently than they used to.
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