FEAR OF FINANCE

We are a nation of wannabe owner/occupiers. According to building society surveys people's main aspiration in the next 10 years is still to own a home of their own. In spite of falling property prices, negative equity and widespread fears of unemployment, the years of Thatcherism merely served to enhance the need to be king of your own castle.

Only this week John Redwood was renewing the Thatcherite commitment to ownership rather than renting. But owning is now easier said than done. People moved regularly up the property ladder, unleashing a DIY frenzy in their wake, because additional costs could be recouped in a matter of months as the property market moved ever upwards. Then the recession slammed the brake on the market and suddenly moving was much more expensive.

The costs of moving are as real as ever. The potential gains look more elusive year after year. The market in certain pockets of the country remains buoyant, particularly in central London, such as Islington and Battersea. In Scotland, medium-priced properties in Edinburgh are also doing well. But they are few and far between. So is it worth moving, or should you stay put until prices pick up?

David Miles at Merrill Lynch would encourage those who can move to take the step up the property ladder. "Now is a good time to build an exposure to residential property if you can afford to absorb the extra costs," he says. "As real incomes continue to rise, added to tax giveaways in the next Budget, before you know it the housing market will be in an upswing again." Importantly, Mr Miles does not believe that house prices will remain flat for ever. "Markets just don't behave that way," he says.

The message is that if you can afford to absorb costs now and wait three to five years to recoup, it is a good time to swap your one-bedroomed flat for something more castle-like.

Others are more cautious. The golden rule now, according to Rob Thomas at UBS, is to buy a property that you are really happy with and not buy just to speculate.

Even he, however, remains optimistic that the housing market will turn around. "The outlook is good once we get past the next two to three years of recovery," he says. "House prices should rise 5-10 per cent across the board."

The solution for those who need to move but cannot, or do not want to, wait the three to four years to make up costs is to rent. To rent is now considered more acceptable and is even considered positively trendy among young professionals.

Since 1988, driven by changes in law relating to short-term tenancies, the rental market has moved up nearly a third. There are nearly a quarter of a million properties throughout the UK for rent.

To capitalise on this trend, Kleinwort Benson Development Capital has funded a pounds 44.2m package for London & Henley, which will acquire, refurbish and let central London residential property in the pounds 125,000-pounds 250,000 price bracket aimed at young professionals.

Ian Grant of KB says there is a fundamental shift towards young professionals renting for several years until salary increases enable them to buy what they would like to live in.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Arts and Entertainment
Paul Walker and Vin Diesel in Fast and Furious 5
film
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
Finacial products from our partners
Property search
Hard labour: a woman bears the load in a factory. But equal treatment is causing pension problems

Women to lose benefits from contracted-out pension scheme

Workers were promised that the state would pay inflation increases on parts of their pensions. But now the DWP disagrees
The Budget, says one critic, should have done more to encourage construction of affordable homes

Help for buyers but where are the homes?

A vote-winning Budget promised less tax, greater savings flexibility, and government handouts for first-time housebuyers
'It will be no wonder if people lack the enthusiasm to save taxfree,' says one expert. But there are ways to beat low rates on cash Isas

How to make the most of Isas: You can save more money now, the returns are tax-free and the rules are flexible

Rob Griffin sees how you can surmount the one big obstacle

Growing number of women under the age of 35 are turning to online gambling

Online gaming is changing the profile of victims, who see it as an answer to difficult relationships but sink deeper into trouble

Ethical investments: Lack of awareness means investors are supporting industries they oppose

Many of us have good intentions now but either we don't switch accounts or we back 'nasty' activities without realising
Payday lenders fail to recognise customers in financial difficulty, the FCA said

Payday lenders accused of unfair practices by watchdog

The Financial Conduct Authority found non-compliance in all reviewed firms

Hooray, you're going to live longer! But what should you do to celebrate?

Pension expert John Lawson talks on why improved longevity is something to plan for carefully

Pension freedom: Steve Webb answers your questions on the big shake-up

The new freedoms arrive in April but many of you have told us that you see problems as well as opportunities. The pensions minister Steve Webb responds
Pension Minister Steve Webb

There are 'dark corners' of the investment and pensions industry, says Pensions Minister

The DWP and the FCA have joined forces to investigate transaction charges in occupational pension schemes

Scottish Power was found to have unacceptably long call waiting times

Scottish Power hit with sales ban by regulator

The company was found to have unacceptably long call waiting times

This phoenix rose from the stage at the London Olympics. The insurer grew out of zombie life insurance funds

Phoenix Life: Chance of a refund for overcharged policyholders has risen

A retired adviser got his money back from the insurer after claiming he had been overcharged. Thousands of others may have a strong case
Expect a new wave of fishing expeditions by fraudsters now we can invest our life savings

Cold callers and your pension: watch out for dangerous boiler room scams

Sean O'Grady received a cold call last week that was much more sinister than normal. Yes, someone wants to get their hands on his pension...

Fuel poverty could claim 100,000 lives over next 15 years, warns energy charity

The NHS is currently bearing a yearly burden of approximately £1.5bn treating cold-related illnesses every winter

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss