UK to become nation of renters
The UK lettings sector is moving towards a European model that sees tenants rent over the long term as part of a lifestyle choice, according to lettingsearch.co.uk.
A recent poll conducted by the lettings only portal reveals that 41% of current tenants cannot raise the money for a deposit or secure a mortgage, suggesting that an increasing number will take the decision to turn away from home ownership.
Lettingsearch.co.uk has noticed a trend of sustained heightened demand for lettings accommodation over the last eighteen months and its lettings agents and landlords are reporting growing instances of longer periods of tenure.
While 27% of tenants claim they are not ready to buy yet, but would like to do so in the future, 14% of those polled are not interested in stepping onto the property ladder at all, preferring to let permanently. In addition, four out of ten prospective first time buyers have come up against the barriers of restrictive lending criteria and the requirement for large deposits, causing many to view letting as a more attractive long term option.
UK home ownership has fallen from 71% of households in 2003 to 68% at the end of 2009 and the poll indicates that a further shift towards the European model of lower home ownership rates may occur. The Government should ensure that the market is prepared for this trend by offering longer term tenancy agreements and putting letting on a more equal footing with homeownership for security and stability.
The UK’s lettings sector remains more diverse than many of its European counterparts with over 7% of tenants let property due to divorce or a split from a partner, a further 7% choose to let having relocated for career or lifestyle reasons and 2% like the flexibility letting offers in terms of location and finance.
Phil Calderbank, Director at lettingsearch.co.uk, comments: “While homeownership will inevitably remain the dream of many Brits, we are seeing mounting evidence that a growing number are turning away from the sales market and choosing lettings as a permanent lifestyle option – a trend exacerbated by the restrictive lending criteria and high deposits heralded by the credit crunch.
“Letting is currently a more attractive alternative for many, removing the risks and initial financial outlay associated with home purchase and offering greater flexibility both financially and in terms of location. While we may never see upwards of 40% of the population living in lettings accommodation like in France and Germany, a move towards this European model would be a positive thing.
“We would urge the Government to improve the security of letting, incentivising the industry to legislate for longer term lets and putting the sector on a more equal footing with homeownership.”