MANY could turn their backs on home ownership in 2012. It’s quite a prediction but one Luton business says economic woes could mean renting takes over as the default way of getting a roof over our heads.
For decades, at least since Margaret Thatcher caught hold of the public mood with the Right to Buy council houses in the 1980s, owning a home was seen as a right of passage. Every Englishman’s home is his castle and all that.
But now, according to letting experts Belvoir, who have an office in Marsh Road, Luton, wider economic woes mean that landscape could change. Every Englishman’s home is someone else’s castle, in other words.
Dorian Gonsalves, MD of Belvoir, which operates more than 140 offices throughout the UK, believes increasing consumer nervousness, rising levels of unemployment and a squeeze on peoples’ purchasing power triggered by a global downturn and the current Eurozone debt crisis are all factors which could make many turn their back on prospective home ownership, predicts the company.
Mr Gonsalves said: “By renting a property people are able to plan their spending much more accurately and also have the flexibility to relocate and follow job offers. These factors are currently gaining increasing importance in the current financial climate.”
On the other side of the equation, the prospect of reduced mortgage lending means that the money just won’t be available for many to buy their own homes.
And, as sellers are unable to sell, more people will be putting homes onto the renting market.
But Adrian Mason, of Belvoir Luton, predicts that rents will rise “modestly” throughout 2012, meaning good news for owners who will see rental yields rise as house prices stay stable or fall but puts renters under pressure of rising costs.
But he added: “However, this is clearly dependent on the outcome of the Eurozone crisis, which is causing major upheaval in the financial markets supplying funding for both buy-to-let and mortgage lending.“
In recent months Belvoir has noticed a number of new trends.
l Double renting, where homeowners who are struggling to sell are now letting out their existing home to provide extra income and moving to another lower cost rental property.
l There is also evidence, says Belvoir, that in many areas of the UK larger builders have started to develop once dormant sites, with a view to letting the properties, rather than attempt to sell them.
l In addition, a trend towards longer lease rental agreements means a rented home is, for many, no longer just a temporary, short term place to live.
l Many UK tenants are now looking to make a rented property their long term home, including more and more families.