The career ladder, the investment ladder, the property ladder: there are a growing number of ladders for young people to climb these days. You might be well-equipped to negotiate your way up the first two; but it's the housing ladder that's likely to present a stumbling block for many graduates.
Whereas most of our parents' generation could reasonably aspire to buy their own home soon after starting their first job, the chances of today's young people becoming mortgage material while still in their 20s are decidedly slim. The average age for a first-time buyer in the UK now stands at 35, an alarming statistic that has risen from 28 just a decade ago.
A combination of factors have contrived to make buying your own home a pipe dream for the majority of 20-somethings, including a severe housing shortage, high property prices and a frozen mortgage market. With the cost of a buying a first home now more than ten times the average UK salary, most young people are forced to fall back on mum and dad or, in most cases, the rental market.
The reduction in the number of first-home buyers has not gone unnoticed by investors. The private rental market is one of the fastest-growing sectors in the UK and investment in buy-to-let properties is booming.
The rental market is growing particularly quickly in London, where half of the capital's eight million residents are estimated to be living in rented properties, compared with 16 per cent on average across the rest of the country. The capital is experiencing one of the biggest demographic surges in its history as its population continues to grow, edging closer to the peak level last reached in the 1930s before decades of migration to the suburbs took their toll.
For those not in a position to buy their own home, renting during the boom brings a new set of challenges. Letting a property is often considered a stress-free alternative to getting a mortgage, but there are more complexities to the rental market than immediately meet the eye.
Rising rental costs are the biggest issue for young people with rents in the capital having increased by 9 per cent in 2011 alone. And students are bearing the brunt of this cost increase. According to a recent survey by advice website Studentbeans.com, eight out of the ten most expensive universities for student housing in the UK were in London. At the top of the list was City University, where students were found to be paying an average of £198 a week for accommodation.
The surge in demand for student housing during the past few years has led to a rise in the number of private landlords undercutting the market by offering substandard properties to students at lower prices.
William Harragin is the founder of Deposit Doctor, a consultancy that helps tenants with negotiating tenancy agreements, rental rates and the return of security deposits in the UK. He set up the service after working in London as a property surveyor for several years, realising that tenants need better protection against unscrupulous landlords.
"A whole generation is being forced into the rental market as the barriers preventing people from owning their own homes increase," William explains. "Unfortunately the legal system in the UK is woefully outdated when it comes to renting, and it's very much in favour of landlords.
"We're seeing particular demand for our services from foreign nationals who often have very little understanding of the laws and regulations surrounding renting in the UK and are often the most easily targeted by landlords out to make a quick buck."
Lording it over the rest
In addition to poor living standards, tenants must also negotiate their way through a legal jungle of rental agreements and ensure their deposit is properly protected. The recent introduction of the Tenancy Deposit Protection Scheme, a government initiative that requires landlords to lodge security deposits with an approved third-party insurance provider, offers tenants a basic level of protection. But the loss of all or part of a deposit remains an all too common occurrence for many renters.
Young people are among the most vulnerable when it comes to getting their deposit back, with nearly 50 per cent of students surveyed by Studentbeans.com claiming to have received less than the full amount of their payment at the end of their contract. One in ten students, meanwhile, claimed to have recouped nothing at all.
With inflation on the rise and house prices remaining stubbornly high, it appears that joining generation rent is set to be a reality of life for university leavers for many years to come. While getting on the housing ladder may be currently beyond the reach of many young people, with a bit of foresight, being a renter need not be the ordeal that it is for many.
Find out more about Deposit Doctor's services at deposit-doctor.co.uk