"...The fact that my flat wouldn't sell had a knock-on effect: it meant that we, in turn, could not buy as I would be unable to raise enough cash for my share of any deposit. Instead, I let out the flat. And my boyfriend and I rented somewhere a bit bigger. Ours is not an exceptional case. The recession and the stagnation of the housing market have, over the past three years, contributed to the fact that Britain is increasingly becoming a nation of renters. Although house prices are falling, they still remain out of the reach of the average earner, particularly now that banks and building societies are tightening up their mortgage regulations. This year, 67% of households in the UK are owner-occupied, down slightly from the all-time high of 71% in 2003. By 2020, that figure is forecast to slip even lower to just over 60%.
Renting, by contrast, is on the up: in 2008, the proportion of households privately renting had jumped to 14% from a low of just 8% in the late 1980s. The estate agent Savills predicts that this figure will rise to 20% over the next decade. At the same time, a survey of more than 2,000 young people by the Chartered Institute of Housing last year found that only a third of 18-24 year-olds believed that home ownership was their "ideal living situation"."
Whether that's possible or sensible depends on whether the rent will cover the mortgage payment - also when I was in negative equity, there was a clause in my mortgage agreement which said I had to ask the lender's permission to rent out. They said no, because the rent would not cover the mortgage. I don't know if mortgage agreements still have these clauses or not (can't find mine at the moment).
Maybe it will change completely to be like Germany e.g. a 30% ownership/70% renting agreement. Just as well - think of all the housing benefit the government/taxpayer may end up paying out to those on low incomes or who lose their job. Mortgagors get nothing if on tax credits, and 50% of the mortgage interest for a limited period if unemployed.
Then there is another problem, which means that rents will increase because demand will increase, and they are already high enough thank you. Alternatively the government could press ahead with it's programme to build hundreds of thousands of new houses to cater for those who cannot buy now, and to keep the rents down.
Buying a house was never really a young person's thing was it? The only reason I did it at 18 was because there was literally no other option. Barratt did a 100 quid down, with 4 months to save the 10% deposit deal while the house was being built.
There's another factor that's going to kick in soon also.
Those who like myself were amongst the first "ordinary people" to own our homes are going to yield this ownership to our heirs with a consequent transfer of wealth downwards through the generations.
In near Europe OTOH renting is and always has been more the norm. There it would seem the done thing is to place one's pension pot into rent-able property so as to create an income stream during the twilight years as opposed to relying on more precarious investments.
I'm letting out my flat in Glasgow after being made redundant last year and moving to London for the job I eventually got (I've been here since Sept 09). So I'm both a landlord and a tenant.
My rent on the Glasgow flat minus the letting agents fees covers my mortgage currently. But that's with the current very low interest rates
- when I took the mortgage out, my monthly payments were considerably higher and the current rent I'm charging now would not cover it.
That said within my overall finances, I'd cope with the mortgage payments rising to that level.
But then the thought occurs, what about my landlord and the rent I pay for my flat here in London? What if my rent went up by a similar proportion as well? That would put a real squeeze on my finances, and might force me to move into a smaller flat (which would be tricky with all the stuff I've got, primarily loads of books).
Selling my Glasgow flat might be an option, but not if house prices are falling. I might be able to jack up the rent, but similar properties in the area don't allow for much leeway on that front at this point in time, though maybe they would if this scenario materialises.
This job pays 19k a year - 289 a week take home. !!! I'd still get 184 a week in tax credits and child benefit. And 19k is a relatively high wage around these parts. Can't believe how much of a chunk NI is these days...
We currently run a system of soviets up north, stealing labour from the productive economy. They should be dismantled.
Commerce follows power. Labour centralised to Westminster, so employers followed. Decentralise power, and business will follow suit.
High speed trains direct from the north to the Channel Tunnel without stopping in London.
Why should government put millions into an already successful tech cluster round Old Street. If you insist on subsidising, why not subsidise smaller clusters elsewhere?
It's probably a decadde now since I was chatting to a German girl about this. She told me that in the bust there, her parents' house had fallen in value by half and, because capital was mortgaged against the house, theis business had gone under as a result. She knew of other cases in her home town too and thought this explained why people were happy to rent.
Hartwich, originally from Germany, points to the example of his own country as a different model. In 2007, 67% of German households were renter-occupied, thanks largely to a de-centralised planning system that encourages building developments and a legal system that gives tenants greater security and more freedom to decorate their own homes. ENDQUOTE
Someone sle quotes higher figure for owner-occupation. But the figures must surely have been made worse by the incorporation of the former "DDR", where owner-occupation must have been very low.
I know quite a few people in Germany. Not one of them is a tenant (as far as I know). The same is true of friends in Italy and The Netherlands and (albeit on a much smaller scale) in Spain. One friend is a tenant in Switzerland.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.