Of the estimated 17 million renters in the UK, over two thirds (70 per cent or 12 million adults) have no plans to purchase a property, reveals new researchby landlord insurer Direct Line for Business. The research shows Britain is moving towards a German housing model with a greater percentage of the population renting.
When it comes to levels of home ownership, official statistics place the UK ahead of only Denmark, Austria and Germany in terms of the proportion of owner-occupied dwellings2.
Direct Line for Business’ analysis suggests that the adage “an Englishman’s home is his castle” may be set to change, with future generations more likely to live in properties owned by other people. The average price paid by first-time buyers in 2017 was £207,693, more than 50 per cent higher than five years previously3 when the same property cost on average £138,663. This is an increase of nearly £70,000, or £1,150 every month.
While affordability is cited as a reason for people not thinking they will buy a home, a fifth of those not looking to buy (22 per cent) simply don’t want the financial commitment that comes with owning a home.
For others, the attractiveness of not owning is flexibility, with one in eleven (nine per cent) wanting to be free to travel and one in 12 (eight per cent) not wanting to be tied to a local area. Over a fifth (22 per cent) of those not planning to buy think the cost of maintaining a property is too high and would rather have a landlord deal with any issues that may arise.
Despite London’s fast-growing property market, which has seen prices rise by more than £12,000 in the past year4, the capital is the region people expect to spend the shortest time renting before buying a home. The average Londoner expects to spend under 12 years renting compared to the UK average of 15 years and two months.
On a regional basis, Scotland currently has the highest proportion of people renting (43 per cent of the region’s adult population), while the West Midlands has the lowest (21 per cent). Across the whole of the UK, London has the highest number of renters, with its 2.7 million tenants accounting for a sixth (16 per cent) of all British renters.
Christina Dimitrov, Business Manager at Direct Line for Business, said: “The UK housing market continues to change and we are seeing a major attitudinal shift when it comes to renting. While price is a factor, many people are increasingly comfortable with the flexibility afforded by renting a property rather than jumping into home ownership.
“In line with the greater demand for rental properties, the Government has introduced tougher controls and regulation. Recent legislative changes mean landlords have stringent guidelines to adhere to in order to ensure the health and wellbeing of their tenants. It is important that landlords ensure all of their properties are adequately insured to minimise distress to them and their tenants should something go wrong.”