March 6, 2012

Are we becoming a nation of renters?

By Gavin Brazg

As first-time buyers continue to face difficulty, such as restricted lending, job-related relocation and and prices rising more than inflation, the number choosing to rent is rising and is set to continue to do so.

Research by property website FindAProperty has found that 38% said that owning a property is not critical and 26% said they have no issue with the prospect of long term renting.

It is more common to rent in Europe, 21% of people in France prefer to rent, and a massive 48% do so in Germany. It would appear that the peculiarly English stigma of not owning your own home is not as great as it once was. Indeed, it wasn’t uncommon even a few years for people to claim they were home owners rather than admit to renting.

The crisis in the economy has made obtaining a mortgage much harder and home repossessions have risen by 5%. Coupled with this is the rise in youth unemployment. Even those who would rather purchase their own home are unable to raise the necessary deposit to satisfy lenders.

The average age of a first time buyer is now 37, suggesting that it takes years to raise a deposit large enough (which can be anything from 25 to 40%).

Renting is expected to become the preferred alternative to owning a property. This also allows for greater mobility. As we emerge from recession, people will be more prepared to change jobs and happy to relocate in their search for the work.

Gavin Brazg is editor of The Advisory.

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