Renting reformer: “A third of people will never own their own home because money they could be saving for mortgage deposits is being wasted on tenancy deposits. It’s crazy”
Research from a leading think tank suggests half of the people born between 1981 and 2000 will still be renting in their 40s – and a third will never own their own home.
The Resolution Foundation is warning “a generation of young people face the prospect of never owning their own home” and is calling for “radical reform” of renting in the UK.
The call is being echoed by deposit reform campaigner Ajay Jagota of deposit-free renting firm Dlighted
The research suggests that 40% of so-called “millennials” are now renting in their thirties, double the rate of the previous generation and four times that for the baby boomers born after the Second World War.
The Resolution Foundation report states: “A rising share of retiree renters, coupled with an ageing population, could more than double the housing benefit bill for pensioners from £6.3 billion today to £16 billion by 2060 – highlighting how everyone ultimately pays for failing to tackle Britain’s housing crisis”.
Ajay Jagota is founder of deposit-free renting firm Dlighted, which uses low-cost deposit replacement insurance to protect landlords and letting agents against rent arrears, property damage and legal costs while allowing tenants to rent with zero deposit.
He is also head of the #ditchthedeposit campaign, which argues the government should encourage the private rented sector to adopt deposit-free renting and and to use the
£4.2bn currently held in deposit accounts to help renters save for a mortgage deposit.
He said: “A third of people will never own their own home because money they could be saving for mortgage deposits is being wasted on tenancy deposits. It’s crazy.
“What is even more crazy is how much money we’re going to be wasting on housing benefits for the retired and are already wasting in deposit protection schemes which could be being used to put this right.
“If a third of the adult population is living in privately rented property by 2050, and rents continue to rise at around 1% a year, than by the time the young people of today are retiring Britain’s deposit bill will be tens of billions of pounds, and possibly closing in on a trillion.
“While I don’t agree with all of the Resolution Foundation’s proposals, they are spot on when they say that tenancy stabilisation is key to improving the private rented sector. The most effective way to do that is to replace deposits with deposit free renting, cutting the cost of renting
“Despite the gloomy picture for renters, this report shows a growing market for rented property for landlords and letting agents, but they have as much as anyone to benefit from better asset protection and the benefits of being able to find and keep good tenants that only deposit free renting can provide”.