There used to be a stigma attached to long-term renting in the UK, particularly if you were bringing up a family. However, due to changes in the housing market, we are now catching up with Continental Europe where long-term renting is viewed as another acceptable option to owning your own home.
Priced out of the market
While renting used to be associated with those in their 20s who were single and commitment-free, the number and range of people forced to rent is widening, with more and more young families renting their homes. Within the next eight years, the Joseph Rowntree Foundation – an organisation that campaigns for change towards a more equal society – has predicted that an extra 1.5million 18 to 30 year olds will be priced out of the housing market. A number of factors are contributing to the continued difficulty of first time buyers to get on to the property ladder. House prices remain high and it is difficult to save sufficient money for a deposit towards mortgage finance thanks to lower earnings and job losses; a lack of houses on the market for sale does not help matters either.
The upside and the downside
The national lettings chain Belvoir, which has 150 offices across the country, has noticed a trend in people remaining as tenants in properties for longer – something which was less commonly seen previously, with people moving into a home of their own as soon as they could. A reduced turnover of tenants means though that in some areas prospective tenants are struggling to find good quality accommodation, as supply is not able to meet demand. While buying a home was always considered more cost-effective than renting over a long period, the balance seems to have evened out, as in some areas monthly rents are cheaper than mortgage payments and there are no fees payable to estate agents, solicitors, for stamp duty or repairs if you do not own a property. Landlords should also be thankful for the current shift towards renting properties for longer periods. Long-term tenants save landlords money, as there is no cost incurred if there is no change of tenant; additionally if the tenants are reliable and always pay their rent on time that is another financial worry removed from the landlord. A family who are staying in a property for a long period of time are also more likely to view and treat it as their own home, so will take better care of it than someone who just sees it as short-term accommodation.