A major shift in attitudes towards homeownership has been identified with 70% of renters revealing they have no plans to purchase a property.
That’s according to analysis by Direct Line which reported 12 million of the 17 million adults renting would prefer to live in properties owned by other people.
It suggests, while many landlords might be struggling with new regulations and rules, there will be more potential for investment in the future as Britain heads towards a German housing model where a greater proportion of the population are tenants.
Indeed, Direct Line said official statistics put the UK ahead of only Denmark, Austria and Germany in terms of the proportion of owner-occupied dwellings.
It said affordability was the main reason many people gave for not planning to buy a home – with the average price paid by first-time buyers rising in five years from £138k to £207k.
But a fifth admitted they did not want to the financial commitment that came with property ownership. Others preferred the flexibility renting provided or thought the cost of maintaining properties was too high. They said they would prefer a landlord to deal with any problems.
Christina Dimitrov, business manager at Direct Line for Business said: “We are seeing a major attitudinal shift when it comes to renting. While price is a factor, many people are increasingly comfortable with the flexibility afforded by renting a property rather than jumping into home ownership.”
The data was released just after the latest Buy-to-Let Britain report from Kent Reliance predicted the prolonged absence of first-time buyers on the market would support the long-term expansion of the private rented sector (PRS).
It discovered that while growth has slowed as landlords acclimatised to new tax and regulatory changes, the fact there were far fewer first-time buyers than there were before the financial crisis meant there was a greater demand for rented accommodation.
If the first-time buyer market didn’t recover to pre-crisis levels, said Kent Reliance, 940,000 fewer would purchase their first home in the next decade than in the ten years prior to 2008.
Andy Golding, chief executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands in buy-to-let, said: “Political opinion may be set against the PRS, but without it, the housing crisis would be deeper still.
“First-time buyer numbers, despite recent fanfare, are a long way from pre-recession levels and with household numbers growing, and new housing starts inadequate, it is the PRS that will continue to pick up the slack.”
