Is Britain undergoing a cultural change over residential property?

 
Is Britain undergoing a cultural change over residential property? (iStock)

The difficulties faced by many people trying to get on the housing ladder have been very well documented in recent years, and for investors in residential property this has meant abundant opportunities.

Despite the problems involved in getting on the property ladder, it has been assumed that the fall in home ownership recorded in the 2011 census - the first time this had happened - was entirely the result of a dysfunctional market, with a lack of supply and rising prices making what was once the norm increasingly hard to accomplish. If the 21st century has produced 'generation rent', it is assumed that this is mainly because they can't get on the housing ladder, not that they don't want to. 

However, this view has been challenged by a new study carried out by insurer Direct Line. It has noted that 12 million of Britain's 17 million renters have no plans to buy a home, something it said represents a sea change in attitudes towards home ownership. Instead of aspiring to be property owners in the traditional British way, it suggests the UK is now undergoing a cultural shift towards a German model in which lifelong renting is the norm.

Of course, the key question is whether this new approach is driven by a genuine change in attitudes in which people no longer regard owning a property as being something to aspire to, or are simply taking a pragmatic view in response to the high cost of buying. 

The data suggests both factors apply. It is true, for example, that 22 per cent do not want the financial commitment. Direct Line drew a distinction between this and affordability, but of course the fact that some might have enough means to afford to buy a home will not change the reality that it will still be a substantial commitment. 

At the same time, however, it does appear that many do now regard renting as having a number of advantages over buying. The poll found nine per cent like the freedom it gives them to travel, while eight per cent preferred not to be tied to a local area. More than a fifth (22 per cent) would prefer that home maintenance costs are met by the landlord instead of themselves. 

Another hint that matters other than affordability might be at play comes from London. Typically, the capital is regarded as a place where most people will rent because buying a house is so much more expensive than almost anywhere else, notwithstanding London weighting in salaries. However, the average resident in the capital actually rents for only 12 years. Not only is this less than the national average of 15 years and two months, but it is the lowest rate in the country. 

Commenting on the findings, business manager at Direct Line for Business Christina Dimitrov, said: "The UK housing market continues to change and 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."

Indeed, new legislation may make renting even more appealing. The abolition of letting agency fees may be seen as a clear sign that the government is keen to make renting life a lot easier for people, not least as this may be a crucial element of a successful housing policy alongside initiatives to help those who still want to buy. Time will tell, but perhaps this particular 'generation rent' will be the first of many.