The start of 2015 brought the news that home ownership levels are set to dip below the French level of 64%, with many believing that this is due to a ‘boom’ in buy-to-let lending. It will be the first time that home ownership levels in the UK have dipped below the levels of their French counterparts since 1988, and shows that attitudes towards home ownership in the UK are beginning to change. This change is credited with more youthful occupiers who are starting to adopt a more continental approach, that echoes the German model, with people actively choosing to rent rather than buy because of the flexibility it provides.
Eurostat Figures Reveal Sharp Decline in Ownership
The latest set of data released by Eurostat (the EU’s official statistics bureau) shows the 2013 levels of home ownership, with figures standing at 64.6% in the UK and 64.3% in France. This means that, based on current trajectories, Britain will have fallen behind France in early 2014. By contrast, in 2007, home ownership in the UK was well over 70%, while it was slightly below 60% in France. Ever since, the gulf has been narrowing.
Home ownership in the UK has declined ever since the Financial Crash of 2008, and the figures now appear at stark odds with the 1980s when Margaret Thatcher launched her dream of home ownership for all.
Increase in Buy-to-Let Ownership Coincides with Changing Perceptions on Renting
Between 2000 and 2012, 2.5 million homes were built in England, but only 400,000 were bought by occupiers. Much of this is due to Britain’s booming buy-to-let sector and a change in attitudes towards renting properties. Overall, tougher mortgage standards are making it more difficult for individual buyers to attain a mortgage, but many buy-to-let borrowers qualify for three year discount mortgages such as the ones offered by Saffron, which makes buy-to-let a legitimate business opportunity for those with disposable income.
Overall, it seems large sectors of the British public are actually quite happy with this state of affairs, with many no longer seeing home ownership as a deifying issue. Historically, home ownership has always been seen as a large issue for many, but it appears as though younger generations particularly are willing to adopt a more continental style of living situation; such as what we see in Germany where renting is the norm.
For these, the flexibility offered by renting without the need for a large deposit allows a greater freedom of lifestyle, with the chance to change homes regularly with relatively little hassle. It is thought by some that this is a legacy of Britain’s increasing university applications, where young adults move away from home and occupy houses on a yearly basis with great flexibility.