UK market moving towards renters rather than ownership
More than one in ten home owners would like to get off the property ladder in the UK which is moving towards a more continental attitude to ownership, according to a new survey.
Some 1.75 million are seriously thinking of selling up and renting instead in 2010 and many no longer aspire to property ownership, the research from unbiased.co.uk, the body that represents Britain’s independent financial advisers.
Karen Barrett, chief executive of Unbiased, said it is clear that the property market crash has had a profound effect on the way people view their homes. ‘For many who own their own home the worry and stress of this through the property market volatility has caused them to rethink whether long term renting is a viable option for them,’ she explained.
‘It has also caused renters to think about their long term options and while some still want to get on the property ladder despite the recent crash, many have now decided that the British status symbol of owning your own home no longer has the same importance,’ she added.
The survey indicates that long term private renting is set to make a comeback among young adults. It also predicts that many homeowners will cash in on the equity in their homes and rent more cheaply instead.
The survey also found that the freedom to move more easily around the country was cited as the most popular attraction of renting. But for many, renting is not a choice but a necessity, as prices remain out of the reach of a new generation of debt laden, job hunting graduates.
Unless they have parental support, finding a 25% deposit is virtually impossible for many young adults and they blame buy-to-let speculators for pushing up real estate prices in the first place and resent having to hand over much of their income to investors.
Figures show that property ownership levels peaked four years ago at 71% of households. Although there may be a move towards more renting as in other European countries, the UK still got a long way to go before it reaches the levels seen in Germany, where nearly two thirds of private residences are rented. The six month assured shorthold tenancy agreements common in Britain give renters little long-term security, and critics say that legal changes are essential to improve tenants’ rights.
Meanwhile a separate survey shows that some 81% of home owners believe UK property prices will rise over the next six months. They believe prices will rise generally by 5.4%, with the value of their own home rising 5.7%, says the survey from property listings website Zoopla. This is a marked turnaround from just one year ago, which marked the low point for housing market confidence, when only one in five homeowners was optimistic about the house price outlook.
Three quarters of buyers say though there is no improvement in mortgage availability, the Housing Market Sentiment Survey also found. Some 75% of those surveyed claim that it is no easier now to get a mortgage than three months ago.