With the General Election done, I thought it time to reflect on renting in the manifestos and party-political broadcasts and ask why do so many people rent?
As the best way to tell the future is to look at to the past, we decided to look at the number of people who rented a century ago (in the 1920’s), and surprisingly, 76% of people rented their home in the UK (renting then was considered the norm). Yet in the latter part of the 1920’s, builders of the suburban housing estates with their bay fronted semis started to sell the dream of home ownership to smart renters.
Up until the mid 1920’s, a mortgage had been seen as a millstone around your neck. Now, due to some clever marketing by those same builders, it was started to be seen as a shrewd long-term investment to buy your own home with a mortgage. It fueled the ambitions and goals of the up and coming well-to-do working class who re-classed themselves as lower-middle class. Meanwhile, the Government encouraged (through tax breaks) people to save in Building Societies, who in turn lent the money to these up and coming new homeowners thorough mortgages.
Roll the clock forward to the decade of the young Elvis, Chuck Berry, and Bill Haley (1950’s) and still 72% of Brits rented their home. Homeownership had boomed in the preceding 30 years, yet so had council house building. Then, as we entered the 1960’s and 1970’s homeownership started to grow at a higher rate than council housing.
The rate of homeownership started to drop substantially after the mid 1990’s, and now we roll the clock forward to today, there is no stigma at all to renting … everyone is doing it. In fact, of the…
46,374 Lancaster residents, 17,202 rent their home
from either the Council, a housing association or private landlord – meaning 37.1% of Lancaster people are tenants. Yet, read the Daily Mail, and you would think the idea of homeownership is deeply embedded in the British soul.
28,430 (61.3%) Lancaster people live in an owner-occupied property
So, we have a paradox – homeowners or renters? The reason I suggest this, is, I noticed in the run up to the General Election that housing was used at as a way to get votes. This is nothing new, as all parties have always used housing to get votes, although previously it was about which party would build more council houses in the 1950’s through to council Right to Buy with Thatcher (and everyone since) – running election campaigns promising everybody their own home in one way or another.
Yet, did you notice at this election something changed? The parties weren’t talking so much about increasing homeownership but about protecting the tenant. It seems the link between homeownership as the main goal of British life is starting to change as we are slowly turning to a more European way of living. Renting is here to stay in Lancaster and incrementally growing year on year. You see, in Britain there is no property tax based on ownership, which many other western countries have. Instead Council Tax is paid by the occupier of the home (meaning the tenant pays – not necessarily the owner).
Both parties wanted to end no-fault evictions, yet Labour went further and mentioned rent controls in their manifesto. As I have mentioned before in other articles on the Lancaster property market, rents since 2008 (even in central London) have not kept up with inflation – so again was that another headline to grab votes/election bribe? The fact is the majority of new British households formed since the Millennium can now expect to rent from a private landlord for life – therefore the parties focused on this important demographic.
Yet even with the new mortgage relief tax rules for landlords and the 200+ pieces of legislation that govern the private rental sector, buy to let is still a viable investment option for most investors in Lancaster. There has never been a better time to purchase buy to let property in Lancaster … but buy wisely. Gone are the days when you would make a profit on anything with four walls and a roof. Most importantly do your homework, take advice and consider your options.