Kat Perriam is one of the few remaining residents of a derelict block of flats that will be demolished early next year. She is not a squatter, nor a tenant determined to defy the evacuation of the east London estate. She is a team assistant at Cosmopolitan magazine.

“When I first went there I was a bit like, ‘Oh my God, what is this place?’,” the 24-year-old said. “But now I know all the guys who sit around on the stairway and I just say hi.”

Ms Perriam is a so-called property guardian: she moves into vacant properties at the request of their owners to ward off squatters and vandals. In return she pays a small amount of rent.

This is her unorthodox solution to the problems facing many of her generation; part of broader housing market dislocations the government hopes to alleviate through its new mortgage guarantee scheme.

Young people have found themselves trapped in a rising rental market from which the obvious escape – to buy a home – is extremely difficult for *those without well-off parents.

Since 2009, average monthly rents in England and Wales have climbed by about 8 per cent, according to LSL Property Services. Last month, rents reached record levels in six regions, including London, where average rent is now about £1,030 a month.

“It’s such a large amount of money to come out of your payslip every month,” Ms Perriam said. Many of her friends’ parents pay half their monthly rent for them, but hers are not in a financial position to help her, so she became a property guardian.

Amid rising rents, mortgage rates have moved in the opposite direction. One result of the Bank of England’s decision to slash interest rates to 0.5 per cent in 2009 was to cut mortgage payments significantly, and as a percentage of disposable income they are now at their lowest in 12 years, according to Halifax, the bank.

In many parts of the country it would clearly make financial sense for people in rental accommodation to buy instead. But house prices remain high relative to incomes, while the country’s bruised banks are demanding big deposits from first-time buyers. In 2007, the average first-time buyer put down 10 per cent of the property price; now they need 20 per cent.

This means prospective buyers must rent for longer while they save, swelling the ranks of renters, pushing up demand and therefore rents – and so making it even harder for tenants to save a deposit.

The affluent can tap the “bank of mum and dad” instead. “[It creates a] social divide between people whose parents can help them with deposits and people whose parents can’t,” Kate Barker, an adviser at Credit Suisse and former member of the Bank of England’s monetary policy committee, said. “The ability to transfer wealth between generations is becoming a more important social divide than used to be the case.”

According to the National Housing Federation, the average age of a first-time home buyer who does not have parental assistance is 37.

The government hopes its new mortgage scheme will offer an alternative way to break the cycle, by allowing buyers of new homes to put down a deposit of just 5 per cent. But unless and until that scheme starts to work, people will continue to find their own solutions, such as living with parents for longer or moving into dilapidated council flats or office blocks.

Ad Hoc, the property guardian company that put Ms Perriam in her flat, said many of its guardians were using the scheme as a means to save a deposit. Camelot, a rival company, said this was the main motivation for 60 per cent of its guardians.

Ms Perriam, though, does not think she will ever be able to buy a property in London. She is just happy to have found a way to get by on her income, albeit one that is rough and ready. When she moved into her flat, in the trendy Brick Lane area, last year, she bought some tins of white paint and painted over the pink and brown walls. She also stuck a sign on the living room door that said, “Time to drink champagne and dance on the table”.

“Sometimes I just think, God, I want to live somewhere now with white walls and laminate flooring,” she said. “But then I think, actually no, because now I can afford to live a good life in London and I wouldn’t be able to if I rented privately.”

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