Aviva : Comment from Aviva on ONS rental market figures

24 Aug 2016

Renting or buying: Property dream continues to be a nightmare for millennials

• The gap between property and wages continues to widen for millennials
• The desire to own a home is the number one financial priority for millennials, but one-in-three fear they have been priced out the property market
• It is to their credit that the young continue to recognise the need to save for their retirement, despite these strong headwinds

Today's rental price data from the ONS shows that the dream of owning a property continues to be a nightmare for today's millennials.

In the year to July, rental prices across Great Britain rose by 2.4%. In London the rise was 3.0%. Earlier in August it was reported that property prices across the UK rose by an average of 8.7% in the year to June 2016. In London, the rise was 12.6%. These rises come at the same time as wages have risen by only 2.2% in the year to June 2016.

Rises in the year to June 2016

House prices	Rent	Wages
8.7%	2.4%	2.2%

Recent research from Aviva found that the dream of owning their own home is the number one financial priority for millennials (i.e. those aged 18 to 25). Following this comes the long-term realisation of the need to save for retirement.

For many, the ambition of owning a home feels like an increasingly distant dream with one-in-three (35%) fearing they have been priced out the property market.

When Aviva asked parents, 43% believed their children or grandchildren would never be able to afford to buy a property without help from their family.

Aviva's research found that millennials have a typical disposable income of just £156 per month, and are more than £6,000 in debt. The typical student expects to take 11 years to pay off their student debt.

With the deposit on a first time property estimated to average approximately £20,000, the challenge facing the younger generation is clear.

Commenting on the latest data, Alistair McQueen, Savings & Retirement Manager at Aviva, said:

'An Englishman (or woman's) home is their castle, but the dream of owning this castle continues to be a nightmare for today's younger generation. The gap between wages and property prices continues to widen.

'Faced with these property pressures, it is understandable that the need to save for retirement can feel like a luxury few can afford.

'It is to the millennials' credit that more than half (57%) see saving for their retirement as a financial priority. It is also to their credit that more prioritise long-term saving (49%) than short-term spending (33%).'

Ends

Sources:

1. ONS Index of private housing rental prices - http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/july2016123
2. ONS House price index - http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/june2016
3. ONS Average weekly earnings - https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/averageweeklyearningsearn01
4. Aviva Family Finance Report, August 2016 - http://www.aviva.com/media/news/item/uk-generation-regret-over-a-third-of-millennials-who-went-to-university-regret-doing-so-as-they-struggle-with-debts-and-squeezed-finances-17653/
5. Aviva Real Retirement Report, July 2016 - http://www.aviva.com/media/news/item/uk-six-million-over-45-homeowners-see-property-as-key-to-their-retirement-income-plans-but-is-there-enough-house-to-go-around-17646/
6. ONS House Price Index, July 2016 - Table 23 and Table 38 - https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/housepriceindexannualtables2039

If you are a journalist and would like further information, please contact:

Aviva Press Office: Fiona Whytock: 07800 692 299 or [e-mail]

Aviva's retirement spokesperson, Alistair McQueen, is available for comment/interview

Notes to editors:

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