It was not too long ago that renting a property held a certain stigma. Things have certainly changed over the last 10 years with increasing numbers of the younger generation opting to rent a property, avoiding the need for a mortgage.
School, Job, House
When I was growing up, buying a house was the next thing that you aimed to achieve after leaving school and getting a job. With the idea being to buy and sell over the years to move up the property ladder and eventually own your home outright. This no longer seems to be the case, with the ambition of today’s younger generation being to live in a quality property rather than own one.
Property Ladder Transformation
This swing in the property market should be taken into consideration by both homeowners and landlords, as its effects could transform the property ladder. Current figures suggest that we are set to become a nation of renters, with rates of homeownership in England having fallen to its lowest level in 29 years. Young people have simply been locked out of the property market as a result of an increase in house prices and wage levels remaining static.
Properties for One
It also seems that the stereotypical property to house a married couple with two children and a dog could also be a thing of the past. The demand for larger houses has increased as families expand, where they have come together after divorce with shared children. That said, at the other end of the scale the demand for properties for one person households has also increased. Just taking renting in Southampton as an example, more than 32% of rental properties are one person households, with only 12.27% of one person households being owner occupied.
Explosion in Demand for Rental
This is a situation that should be taken into account by property landlords, particularly if these Southampton renting statistics are reflected in other cities across the country, which I am sure they are. These statistics alone show an explosion in demand for rental properties. Quite simply home ownership costs more.
What will become of Home Ownership?
Great news for landlords with big property investment plans, with renting becoming the outright winner in the battle of home ownership vs renting. But, what becomes of those of us that own our homes outright or are still paying our mortgages? If we become a nation of renters will this push down the property values? Will we all move less and remain in the same property handing it down through the family? And, if we are not selling our properties where are the properties for the rental market going to come from?
What do you think, is home ownership a thing of the past? Are you a home owner, tenant or landlord that has seen benefits from this swing in the market? Share your thoughts in the comments.