There was a model in the UK, probably driven by Maggie Thatcher of aspiring to own your own home. We were encouraged to become property owners – not renters. Renting was for a short term only. It was certainly seen as a second-class system of living.
But things are changing – and have been for a while. 10 years ago there were estimated to be be 2.5 million houses in the rented sector – today it is thought there are 4.8m – nearly double. And the evidence suggests this is a growing market. In 5 years time there could be close on 6m houses…
Rent in the economy is estimated to be £48bn and this is estimated to rise to £70bn by 2017.
So why the changes?
Firstly, bricks and mortar aren’t quite the same safe investment they always were. We have seen some significant drops in value – or rather swings in value – from 2007 to today. Those with large mortgages and small amounts of equity have seen their own money disappear. Secondly, the cost of accessing the buyers market is now high – a 10% deposit on a £150,000 house (forget London for the moment!) is a huge amount to stump up! Parents usually provide the key!
But we are also seeing a bit of a shift in perception. Renting isn’t the social stigma it used to be. We have probably seen the market change as a result of the improvement in student accommodation. For some time the student market has been ahead of the private rented sector – spotting that people are prepared to pay a higher price for better quality.
So we now see some better quality rented stock – for grown ups. That model seems to be getting some traction. There are some new entrants to the market who see this as a massive opportunity – the likes of UK-R – who I am working with. We hope that they will have a pilot scheme in Nottingham soon. It will show a new way of living – and not a moment too soon!