Generation Rent
My name is Gemma, I am 35 years old, nearly 36 actually and I am still renting. It almost sounds like a confession. Something to be ashamed of. But, I just never had the money for it. Or maybe I did, I just didn’t start saving early enough in life. Of all the friends I have who have successfully managed to get a foot on the property ladder, very few have done it on their own.
Most have done it with financial assistance from family members. Even those who did it as one half of a couple. But what if your family aren’t in a position to help financially? We are, without a doubt, generation rent with it becoming increasingly difficult to save for that all important deposit in the midst of escalating house prices.
Let’s have a look at my situation. I’ve been single for most of my adult life, meaning that if I had ever looked to buy somewhere over the last, say, 10 years, I would have had to do it myself. This not only means saving up the deposit myself, but also, I would only be able to borrow up to 4 times my salary for whatever property I wanted to buy.
A quick search for 1 bed flats in Bristol and they’re generally starting around £150,000. Which is insane considering you can buy a 3 or 4 bed house in my home-town for the same money! In order for me to borrow £150,000 I’d have to be earning £37,500 annually (150,000/4 = 37500). I’m not even earning that now, let alone 9 years ago when I first moved to Bristol for an entry level job in a Publishing company.
Okay, so let’s imagine I could get a one bed-flat for 4 times my salary. I am now in a relationship and our combined salary is now substantially over this, but of course, we wouldn’t be looking for a 1 bed flat in Bristol. Now we need a 3 bed house for us and his kids. I’ll come back to this, but for now, let’s assume I am still a single adult looking for a 1 bed flat in Bristol, where I live and work. So I’d need a 10% deposit, right? Minimum. Okay, so that shouldn’t be too hard. Except that, for the first few years I lived in Bristol I wasn’t earning enough to save anything. I’d get paid and pay my rent, bills, phone etc. Then I’d have to budget my food expenses so that I didn’t spend too much and leave myself short at the end of the month, which did happen on several occasions! I’m sure we’ve all been there, living off bread and pasta with butter for a week before pay day…
The last few years I’ve been earning a bit more, so I have been saving some money. But, and this is going to sound like such a first world problem, there’s so much pressure to spend your money. When I turned 30 I went on holiday with my friends (actually it was while I was 29, they’re all a year older than me so technically I celebrated our joint 30ths while I was still in my 20s) and then for my actual 30th I went to New York. Cause you have to celebrate these milestones. I also went out at least once a week with my friends. Maybe I’d have got closer to a deposit had I not bought all those pints, but we still have to live, right? Being a 20-something with a cheap flat on the outskirts, but no friends to enjoy it with isn’t the ideal situation.
So yes, now I have been saving, but I’m still quite a bit off a 10% deposit (I’m not even that close to a 5% one, let’s be honest). After I get paid each month and account for all of my outgoings, rent, bills, subscriptions, car tax, car insurance, petrol, food, gym membership etc I can afford to put some money in savings. Those savings go neatly into a separate savings account every month, but then it’s someone’s birthday so I have to get them a gift. Or they want to go out for dinner/drinks to celebrate. So I dip into my savings. Then someone is getting married, so I have to go to their hen do, buy a gift, pay for accommodation/travel. So I dip into my savings. Or sometimes, I want to travel home to see my family, so once again, I’ve dipped into my savings.
Sometimes I just overspend on food/takeaways so have to dip into it to simply make it to the end of the month. There was that whole pandemic thing last year, which meant my usual expenses weren’t quite as much and I was saving more – only back in September I bought a car with what I’d managed to save through lockdown because getting on public transport, that I’d always relied on, didn’t seem like such a good idea anymore.
Sure, I could cut back. But in all honestly, the whole buying a flat thing feels so far out of reach. When your target is in the thousands of £££s and you’re barely saving £100 a month, it feels a little pointless. To save a 10% deposit for a £150k 1 bed flat in Bristol, it would take me 12.5 years saving £100 per month. Even if I started when I turned 30 (and was no longer living month to month financially) I’d be 42 before I’d saved £15k. Surely I should enjoy my life as generation rent and hope one day my savings eventually make it to the 10% deposit, shouldn’t I?
The government have, of course, launched schemes to help first time buyers. Help to Buy, shared ownerships etc. But I genuinely believe there’s a flaw in the system that despite the fact that I’m in a good job and have been for 8 years, I’m only now in a financial position where I would be loaned enough money to buy a flat in my area. As mentioned before, you’re likely to only get a mortgage on 4x your salary. What if you don’t earn enough? My friend did a shared ownership thing where she paid rent to the housing association who owned half her flat and then payments for her mortgage. I asked her to give me a break down of her expenses and at the time I realised that I couldn’t afford to do the same thing. Her rent and mortgage was the same cost as my rent and bills combined. She still had to pay council tax, water, gas, electricity, phonebill etc on top of that. Looking at my monthly incoming salary, I just couldn’t cover what she had outgoing. And it’s not like she was finding it easy, she was living month to month, counting the pennies to make them stretch praying her boiler didn’t break down.
Now, of course, I’m in a relationship and we can pool our salaries, which puts us in a much better position for buying. 4x our combined salaries is definitely healthier than mine alone. Eventually we’ll be looking to buy a house. Saving that elusive deposit is slightly easier now that there’s two of us doing it. £200 will get that £15k deposit in 6 years! But seriously, it’s still not easy. I’m good at budgeting, I have a spreadsheet and everything! But we’re still looking at not being able to buy for another 5 years or so which will put me as a first time buyer in my 40s. And if I hadn’t met him, I’m not sure I’d ever make it on to the property ladder.
Don’t get me wrong, I’m sure it’s possible and people have successfully done it. But I’m tired of seeing articles suggesting it’s easy to save money for a deposit and ‘this is how I’ve done it’. Those people generally live with their parents and pay no rent. I’m sure if that had been an option for me I’d have been able to do it too, but I live 400 miles away from my mum… that’s too far a commute for work for me! What I’d really like to happen, is the fact that I’ve successfully paid rent and maintained property as a tenant for around 15 years to be taken into account when looking for a mortgage. I’ve proved that I’m reliable and trustworthy, but that seemingly means nothing.
For now, at least for the next few years, I’ll be continuing the generation rent life. Now at least I have a glimmer of hope that maybe one day I’ll make it, because I’m not doing it on my own. Anyone who has successfully done it solo, without living at home while saving for it, I take my hat off to you. I didn’t have the determination or will power to put my life on hold to save for it. Or at least I never found a way to live my life and save at the same time. I’d have been alone, bored and miserable and living out in the sticks cause that’s all my meagre salary would have allowed me to borrow for. So yes, my name is Gemma, I’m 35 years old and I still rent.
Written by Gemma Greig
I’m Gemma, an aspiring PT, photographer and writer by night and editor by day. When I’m not lifting heavy things in the gym, I’ve got my head in the books studying, or making yet another attempt to write that elusive novel. I’m originally from Scotland, but I’ve been living in England for over 8 years.