Kate Hughes: Rent or not, there's no place like home
Saturday 04 September 2010
To be honest, it wasn't until the estate agent cheerfully told me she had sold her family home and was now renting that I really tuned back in. "It's the perfect solution for us," she shouldn't have said. "We can live somewhere far nicer than we would ever have been able to buy, and if the boiler explodes in the middle of the night it's someone else's problem."
Put that way, I suddenly began to question why I was battling to snatch up a property we would "add value to" rather than simply enjoy living in. So I have to admit I was, at best, ambivalent about news this week from the National Housing Federation that homeowners who bought at the height of the market face another four years of negative equity.
Is everyone who bought a home in 2007 planning an imminent move? Because these are the only people this will actually affect in any significant way (though, hopefully, those who are forced to move will forgive me). Surely if it's your home, you will be there for a while and these fluctuations won't matter?
But it's this "home" word that's the problem because it has been rubbed out and overwritten by "investment". Call me crazy, or a bit simple, but I don't want an investment, I just want to live somewhere that I don't need permission to hang pictures on the walls or paint the bathroom my favourite colour (blue). I want a bona fide home, but with so many amateur property "investors" out there, and with lending criteria out of reach, I've got no chance.
But why the hell am I bothering? As my friendly property professional succinctly demonstrated, there is nothing intrinsically bad about renting. Continental Europeans seem to find it a great solution all round, and certainly don't seem to spend sleepless nights worrying about what the latest Halifax house price survey means for them. So I'm giving up, at least for now, and it looks like I'm not the only one.
In the first seven months of 2010, according to the Royal Institution of Chartered Surveyors, 340,000 mortgages were approved – only 30,000 more than the same period last year and well down on historical norms. Clearly, market uncertainty and a lack of funding is playing a part in keeping would-be buyers away. And with inflation and interest rates set to rise, I'm starting to think I might just be able to pass off my frightened retreat as a lucky escape.
Speaking of escapes, hats off to those who have responded to the recession not by bemoaning their lot, but by taking stock and deciding to do something different. Research from Santander shows that 1.2 million people have taken a "lifestyle break" since 2008, considerably more than the 2.8 million who made the same call in the eight years from 2000.
Yes, some were students without a place at university and others were struggling with an increasingly competitive jobs market, with travel and the chance to work abroad big drivers for the change. But 20 per cent of those planning a little time out say that they just want a rest from the rat-race.
Economists talk about how recessions strip deadwood from companies, making their financial health going forward far more robust. Clearly, that can also be said for our personal health.
This recession has made life a rough ride for many but, for others, being forced to assess what they really want from life has done them a massive favour, financially as well as personally.
When those 1.2 million people come back, they will probably be more confident of their goals and aspirations and clearer about the stuff that really doesn't matter, like the bigger house, the must-have gadgets and the platinum credit cards.
So that must surely mean that this new-found psychological rude health will translate directly into financial rude health. Brilliant, I can't wait.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
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