South: If homeownership is down, is renting up? asks Romans
Home ownership across England is at its lowest level in 30 years, according to the Resolution Foundation. Across the EU, almost three in 10 people rent rather than own a property. Romans property experts take a closer look at how this compares to the UK property market.
In the UK 35.2% rent; in Germany a substantial 47.5% rent; yet in Spain only 21.2% rent. So while we often believe that buying a home and getting on the ‘property ladder’ is a very British mindset, it seems other countries have taken the lead in owning property. 78.8% in Spain own compared to 64.8% in the UK.
In 2014 there were only five other countries in Europe with a lower percentage of home owners than the UK, including Germany (52.5%) and Austria (57.2%).
Why is renting becoming more popular?
During the past decade renting has steadily grown in popularity in the UK, with a 31.8% increase in renting between 2007 and 2014*.
During the 1970s and 80s there was 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 things have changed; 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.
Looking at the bigger picture, it’s clear that the type of area you live in also has a big impact on whether you’re likely to buy or rent. We know how unaffordable London property has become, which has led to half of the people living there renting. In comparison, in Sydney 65.2% rent, in New York City 69% and in Berlin a 89% rent.**
“Of course not everyone has been forced to rent, and for many it’s a preferred lifestyle choice,” said Michael Cook, managing director of Romans Lettings, “but the fact is that rising property prices have meant more people are being priced out of buying.”
Who is actually renting?
It’s not just students and young professionals renting anymore, it’s families 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 Cook.
But what sort of property do we live in?
The UK loves houses not flats
It’s true. We have a lot more houses in the UK than flats, even in the cities, compared to the rest of Europe.
In 2014, four out of every 10 people across the EU lived in a flat. Remarkably, in the UK only 14.4% did, compared to 66.5% in Spain – remember, in Spain 78.8% own property, so maybe with living in a flat being the norm, buying a home is simply more affordable?
Semi-detached houses are the most common property type in the UK, with six out of 10 people living in one in 2014, whereas across the EU only a quarter of people do.
The number of people living in detached houses was highest in Croatia (72.6 %), Slovenia (65.4 %) and Serbia (62.7%). The data from Eurostat also shows that detached houses are the least common in Malta (5.4%), Spain (13.4%), Netherlands (15.8), and Italy (21.2%).
So, the truth is Europeans don’t love renting any more than us, in fact, renting in the UK is only showing signs of increasing. (And we really do love houses.)
* Eurostat 2014
** US Census Bureau, National Real Estate Development Council (India), Office for National Statistics
