Sheffield housing: Young people stuck in rent cycle could spend 11 years saving for deposit

Young renters, who save the typical monthly amount for people in the UK, will spend 11 years saving for the average Sheffield house, data shows.

Properties in Sheffield cost an average of £239,768 last year. To put down a 10 per cent deposit for a house at that price, someone saving the median amount of £180 per month would have to save for 11 years.

What does this mean for young people trying to buy?

It is no secret that wages have not been keeping up with increasing house prices, trapping many young adults in a rent cycle and hindering their ability to save.

The steadily advancing age of first-time buyers reflects this - prospective homeowners now expect to be 37 years old by the time they get on the ladder, compared to a now-unimaginable age of 29, which was the average in 2011.

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Where is their money going?

Since 2015, rent has increased faster than income (of private-renting households) in England. Half of all adults under 35 rent privately in the UK.

In Yorkshire, for every £5 that private renters make, £1.14 goes to their landlord.

Shockingly, this makes the region the most affordable in the UK for them, in terms of the proportion of income spent on rent.

The government considers "affordable" rent to be anything under £1.50 of every £5 of income. This means London is the only “unaffordable” region, with a median of £1.75 spent renting.

Is a mortgage any more manageable?

Presuming that someone was able to put aside a 10 per cent deposit, the typical threshold for first-time buyers, getting a mortgage approved is challenging, with individuals finding themselves in competition with developers and landlords.

And it is no wonder young people are being priced out. A terraced house cost £183,000 in Sheffield in December 2023 - an increase of one third compared to five years before.

With it in mind that lenders are generally able to lend 4.5x an annual income, someone on today’s median UK salary of around £29,000 would have been approved for that house five years ago, but not today.

Presuming that person did get approved today, typical monthly payments on that house, with a 25-year mortgage and a 10 per cent deposit, are £1,012. 

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That is over half their monthly take-home pay, making a decent quality of life during the cost of living crisis particularly difficult.

Kirsty Hamilton, one of these individuals, said: "One of the houses I bid on [in Sheffield] got snapped up by a developer, and they are going to refurbish it and rent it out to multiple people.

"There are so many houses and flats that no one other than them can buy."