In February of this year, the government introduced a White Paper on housing. It is not a short document, but it appears to recognise two things:
- That the British housing market is not at present working as well as it might; and
- That more people than has been the case for the last few decades will be long-term renters of their homes, rather than owner-occupiers.
What is interesting about this change is that the attitude of the people in Britain seems to be becoming more relaxed on the subject of renting rather than buying. Are we becoming more like the French and Germans, who have always been long-term renters? If so, the provisions in the White Paper to make life easier for long-term tenants will be welcome.
This is not new, but it is a change from how life has been in Britain for the past 60 or 70 years. In the 18th century, most people – even those high on the wealth scale – were tenants. They may have had quite striking residences, but those residences were rented. This continued into the 19th century, and it was only with the rise of the salaried middle-class that people began to buy their homes rather than to rent them. And – and this was a tendency that lasted until just before the outbreak of World War II – a house was a shrinking asset. If people bought one when they married, they expected its value to have fallen quite significantly by the time they celebrated their golden wedding.
Then, in the 1950s and 1960s, there was a huge surge in the drive for homeownership. People who would previously have been seen as working class found themselves in better jobs with more money and they wanted to own their own home. Those six or seven decades of demand for homeownership appear to be coming to an end. The stigma that was attached to living in rented accommodation also seems to be diminishing. The government’s own statistics indicate that 71% of homes were owner-occupied in 2005 and, only five years later, that had dropped to 67%. It continues to fall.
In part, this trend is the result of a rise in house prices to the point where young people find it very difficult to get onto the housing ladder for even the smallest house or apartment. And that is exacerbated by the fact that rents, too, have risen, and anyone (other than the rich) renting a home in or near London is probably paying so much rent that there is nothing left to save towards a deposit.
As ever, then, it is reality that is changing the way people think. There is another factor, though, and that is that people are realising that renting brings a welcome degree of freedom that you may not have if you own your own property. People change jobs frequently now, and a job change can mean relocation – perhaps 100 miles away, perhaps to another country. Making that move may not be so easy if you have a house and you can’t find a buyer – and something that is clear in today’s market is that finding a new tenant can take a lot less time than selling a home.