The popularity of renting is increasing at such a rate that it has taken over homeownership among young people.
With more people expected to be renting than owning their own home by 2025, it’s time to overhaul the five biggest myths.
Myth 1: the UK is a nation of homeowners
This certainly was the case – about thirty years ago. Since 2000, the number of people aged 20 to 39 living in private rented accommodation has increased from 20% to 50%. Within an entire generation the split of renting to homeownership is an even 50:50.
An undersupply of housing can be listed as a factor, but it’s not the only one. Generation Y, those aged 20 to 39, like to rent. Renting allows them to live within a city centre for a fraction of the cost and time it takes to afford a deposit and mortgage payments.
7.2 million households will privately rent by 2025 and that number is only expected to increase. In less than a decade there will be more people renting privately than owning with a mortgage – the UK is becoming a nation of renters.
Myth 2: people only rent when they can’t afford a house
Renting has become a choice, one that complements a lifestyle where homeownership isn’t equated with success. The average length of time spent within the sector is growing year-on-year, with 90% of tenants viewing their rental accommodation as “home”.
Of course, some people do rent and view that period as an interim before purchasing their own home, but renting can offer flexibility and opportunity that homeownership simply can’t.
Some of the world’s richest and most famous celebrities also choose to rent – for no other reason than it fits their lifestyle. Beyoncé, Justin Bieber and Taylor Swift are examples of influential celebrities who have chosen to rent, a prime example where affordability to purchase was certainly not a question.
Myth 3: every property is buy-to-let
Buy-to-let has a poor reputation, which has led to the belief that every rental property falls within the category. This isn’t the case. Not every rental property is a repurposed house.
Build-to-rent is purpose-built accommodation geared towards providing a growing number of tenants what they want. It’s not simply a roof over their head, but a home. A professionally managed, high-quality answer for renters.
With estimates of up to £50 billion expected to be invested in the sector before 2020, build-to-rent is swiftly becoming the modern face of the private rented sector.
Myth 4: all landlords are terrible
A recent study showed that 79% of tenants are satisfied with their current landlord, rising to 92% in some areas within the UK. The growing reputation of fraught relationships between landlord and tenant are borne from the escalation of a few isolated incidents.
Not all tenants are awful either. Trashing rental properties and having unrealistic expectations of their rental agreement and landlord. There are exceptions to every rule, but with the popularity rising in the private rented sector and more tenants viewing their rental property as “home”, it stands to reason that tenant and landlord have a mutual respect on the whole.
That’s not to say there isn’t room for improvement in the tenant-landlord relationship, but that is a blanket statement applicable to plenty.
Myth 5: renting is not cost effective
In a recent article, we discussed how you can rent a 2-bed Manchester city centre apartment for 4.5 years before it equals the cost of a deposit and living in the very same apartment for a year.
With renting, you pay for what you want and for how long you want it. Particularly with members of Generation Y who crave an urban lifestyle and opportunities to network and advance their careers, a city centre apartment is a mid-term ideal. They don’t want to wait for years to afford a deposit, they want to be involved immediately and renting allows them that privilege.
Other costs, including upkeep of the rental property, fall on the landlord and/or estate agent. In that regard, tenants save money on general property maintenance that those who own their home certainly don’t.