Nownership: the rise of long-term renters
Is long-term renting becoming more of a lifestyle choice, or is it viewed as the only option by tenants who want, but can’t afford, to climb onto the property ladder? And is it on the rise?
It remains to be seen whether or not British attitudes to long-term renting are changing. Look to the continent, for example. In counties like The Netherlands or Germany, where a more flexible rental market thrives, longer-term renting is the norm, and attitudes towards those who rent in the long- term are positive. In Britain, buying a property is frequently viewed as a milestone, a step into adulthood. But home ownership isn’t for everyone, and in some cases it can be a burden. In addition, market conditions are such that many tenants are actively choosing to rent for a longer period of time.
Why rent in the long-term?
- Flexibility – if you only plan to stay in an area for a limited period of time, renting gives tenants the freedom and ease to move when they choose to. People move jobs more regularly than they used to, and this might play a role in an individual’s decision to rent rather than buy.
- No worries about upkeep – renters don’t need to worry about paying for maintenance, repairs and upkeep. As a tenant, you need to look after the property, but ultimately when problems occur, it’s the landlord’s responsibility to resolve it.
- No risk for those renting – if you own a property, then keeping up with mortgage payments is a must. If you find you can’t keep up with mortgage payments, then the property becomes your greatest liability.
It was reported last year that homeownership in Britain had fallen to its lowest levels for 30 years, as the gap between earnings and house prices gaped wider. Many reports made the assumption that most renters were would-be buyers frustrated at not being able to climb onto the property ladder.
According to statistics, many are renting as house prices have increased to the extent that it is hard to get a mortgage. But there is evidence that more and more tenants (millennials and over 45s) are making the decision to rent simply because they prefer the flexibility, freedom and independence which comes with renting. Generally, millennials are more likely to be renting while they save for a mortgage, while over 45s are more inclined to stay where they are and rent the same property in the longer-term.
However, increasing numbers of retirees and families are private sector renters. According to the 2016 English Housing Survey, the number of families renting in the longer-term increased by 7% between 2005 – 2015.
The buy-to-let market has come under much scrutiny in recent years, and the government has introduced a series of measures which aim to slow buy-to-let investor activity in order to free up housing stock for first-time buyers. However, with not enough homes being built, many would-be buyers need, and in many cases want, to keep renting, so there is a continued demand for rental properties.
The government’s Housing White Paper 2017 partly focuses on the promotion of longer, three-year tenancies and more affordable rental deals for tenants, while ensuring security for tenants in the private rented sector.
Whether tenants are renting in the longer-term out of choice or because they have been priced out of buying their own property, the number of people renting in the long-term is rising.
Are you a landlord looking to let out your London property? Get in touch with Assetgrove today for a peace of mind lettings service.