The emergence of the Guppies – Why bridging finance has never been more important

02 Feb 2024

As the cost-of-living crisis continues to take its toll on personal finances, a new class of under-40s renters has emerged – ‘guppies’ or young professionals who have given up on buying property. According to Zoopla, only one in five 18–39-year-olds “definitely” think they would be able to purchase a home in the next decade.  Guppies are seeing their savings eroded by living costs, with 64% of those surveyed citing the cost-of-living crisis as the reason why they’ve given up on buying a home.

While UK house prices fall at the fastest rate in more than a decade, higher interest rates have meant owning a home is still out of reach for many young people.  According to the ONS, the average London home now costs 13.9 times the typical household income, compared to a house price-to-income ratio of 8.4 for the whole of England.

But it’s not necessarily a negative that many young professionals have turned their back on buying a home. It instead hints at a burgeoning continental European style rental culture, encouraged by the proposals of the Renters (Reform Bill) (RRB), which is currently making its way through Parliament.

The Bill provides added protections for tenants and is expected to lead to the professionalisation of the private rented sector (PRS).

In its white paper, ‘A fairer private rented sector’, the Government outlined proposals to extend the Decent Homes Standard to the PRS. The standard currently requires that public housing must be free from serious health and safety hazards. Raising standards in this way could have the benefit of finally forcing rogue landlords to exit the market.

With the housing market in flux and a more European style rental culture on the horizon, bridging finance is more important than ever before. Landlords and investors building their portfolio will look to bridging finance as a speedy short-term solution to realise their property ambitions, particularly when purchasing at auction.

Commercial Acceptances Bridging Finance Lenders

As one of the UK’s first companies to provide bridging loans, we fully understand the market and support established and experienced residential and commercial property developers, investors and traders with fast, personal and flexible service. With Commercial Acceptances, you’re working with a team of lenders with decades of experience between them. We train our people in all areas of bridging and development finance, so they are fully versed in origination, due diligence, valuations, legals, completions, day-to-day account management and redemptions.

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