Renting on the rise as home ownership falls
HOME ownership across England is at its lowest level in 30 years, according to independent British think tank Resolution Foundation. It may be a surprise to learn that although we think of ourselves as a nation of home owners, more people in Spain own a home than in Britain. So why is renting on the increase in the UK?
More than 30% of people now rent in the UK and just over 64% own, compared to 47% renting in Germany and 52% owning and only 21% renting in Spain, where more than 78% own homes.
Over the last decade, renting has steadily grown in popularity in the UK, with a 32% increase in renting between 2007 and 2014. But why is this?
During the 1970s and 80s there was a government-led rise in home ownership, fuelled by Margaret Thatcher’s Right to Buy policy.This allowed occupants to buy council houses cheaply, and give themselves a head start on the property ladder.
Since then a combination of increasing house prices between 2004 and 2007 and the unavailability of mortgage finance as a result of the credit crunch has resulted in more people turning to the rental sector. Plus, the area you live can make a big difference; property in London has become unaffordable for many, which has led to half the people living there renting. Renting is also a way of life in other big cities: in Sydney 65.2% rent, in New York City 69% and in Berlin 89%.
“Of course not everyone has been forced to rent, and for many it’s a preferred lifestyle choice,” commented Bradley Smith, lettings manager at Romans Uxbridge. “But the fact is that rising property prices have meant more people are being priced out of buying.”
Students and young professionals are not the only ones renting these days, more families are doing so too.
The latest English Housing Survey revealed that in 2014-15, 37% of families with children lived in the private rental sector, compared to 30% in 2004-05.This means that approximately 912,000 more households with children have joined the private rental sector in the past 10 years.
“As renting continues to grow in popularity I believe it will start to change our mindset as a nation that for many years has measured success against owning a property,” added Bradley. Looking for your next home? Talk to your local team of experienced agents at Romans Uxbridge and search through hundreds of properties available to buy and rent in the local area on romans.co.uk.