Stepping off the housing ladder needn’t be a backward move
With house prices soaring, more people are choosing to rent long term
It may make hard reading for younger people looking to buy their first home, but there are those who choose to vacate their home-ownership ambitions, sell-up and move into rented accommodation. And guess what, many of them are happy about it.
Take Kathryn Martino, 34, from Bath, who actively stepped off the property ladder five years back.
“This isn’t a question of not being able to afford to buy – far from it. It’s simply that I choose not too as I’ve got used to the lifestyle. I’m currently debt-free and don’t fancy being in debt for the sake of having a place to call home. I’ve already got that, but without the ties,” she says.
Kathryn has no desire to buy again and thinks there are better things she could spend her money on.
Her one-bedroom apartment in the centre of town suits her and her husband perfectly; the pair enjoy the flexibility, the luxury of moving around, and the savings on maintenance or repair bills when something goes wrong, which they argue generally makes for increased, disposable income and better quality of life.
“My husband and I also love not having to commit to a certain city and should we choose to move on, we wouldn’t have the hassle of having to sell a property,” says Kathryn.
Home ownership has been falling since 2006, according to the Government’s English Housing Survey published this week. Around one in three homeowners in England are pensioners with younger generations frozen out of the market by soaring prices. But instead of lamenting the fact that owning your own property is out of reach, is it time to embrace long-term renting?
Nick Cooper, managing director of property firm Northwood, said: “We’re seeing a whole cross-section of society privately renting their homes. As house prices continue to rise, long-term tenancies are becoming the norm, allowing people to live in houses and areas where they wouldn’t necessarily be able to buy. Renting is no longer seen as a short-term option or stop-gap measure.”
Home ownership reached its peak in 2003 when 71 per cent owned their own home. Fast forward to today, however, and outlooks are changing. Properties are too expensive, real wages are lower, mortgages are harder to come by and people stay single for longer and get divorced more often – all of which makes home ownership a less-viable option. By 2020 in the capital, for instance, there will be more renters than owners.
Rents are rising, although at a lower rate than many people think – figures from the Office for National Statistics show they rose by 1.3 per cent in the 12 months to May, which is well below the rate of inflation, although hikes in London (up by 2.2 per cent) outpaced other regions considerably.
A particular worry is that not all letting agents and landlords are prepared for the changing needs of the modern market. Much of the private rented sector is still based on short-term lets – if tenants are seen as disposable, there are far more vulnerable to being treated unfairly by agents and landlords alike.
Housing charity Shelter has also pointed out that having to move can be hugely disruptive to families with children, potentially having only two months’ notice to pack up their things and move out should their landlord decide it’s time for them to go. The Labour Party is in agreement, supporting the idea of longer-term tenancies and stable rents in a recent policy review.
One issue is that there are now many more “accidental landlords”, many of whom are not in a position to commit to long-term lets. However, it is not inconceivable to imagine that landlords who are keen to keep tenants in place for many years (preferring the security and no void periods) can advertise their properties as such, while those who prefer to let on a more temporary basis can be matched up with like-minded tenants.
Lenders can be a barrier as many buy-to-let mortgages restrict the length of tenancies that landlords can initially offer to 12 months, but some of them are showing willing – Woolwich already allows tenancies of up to two years and The Mortgage Works, part of Nationwide Building Society, has recently changed its terms to allow landlords to offer lets of up to three years.
“Other lenders should follow Nationwide’s lead and accept tenancies longer than 12 months as this provides more stability for tenants and there is no real reason why they shouldn’t,” says Mark Harris, of mortgage broker SPF Private Clients. “Some lenders already allow longer-term housing association lets or corporate lets.”
While we wait for the market to catch up, there are things that tenants can do to protect themselves. If you’re looking for a home to rent you should stick to professional lettings agents with accreditation from ARLA (Association of Residential Letting Agents) and insurance to back them up – this will at least give you somewhere to go if something goes wrong.
Brush up on your rights and obligations. All new tenancies are on an assured shorthold basis, but it will either be a fixed-term tenancy running for a set period such as six months, or a periodic tenancy rolling on a weekly/monthly basis. Legally, you are free to live there, undisturbed, unless the tenancy is ended properly, or your landlord gets a court order to evict you (which is, unfortunately, very easy for them to get). The landlord must put your deposit in a protection scheme, and comply with regulations regarding the safety and repair of utilities such as gas and electricity. For their part, tenants must keep the property in good repair.
Problems can arise if landlords prefer to evict their tenants rather than carry out costly repairs, but you should seek some advice if this is the case – try your local council, or get in touch with Shelter – and if your landlord tries to evict you without serving you proper notice or without a court order, you may be able to get your own court order to force them to allow you back in.
Buyers beware of new-build home headaches
Are you ready for pensions reforms?
Dirty tricks in a divorce can cause some nasty surprises
Simon Read: Frozen in time - the expat British pensioners who deserve a better deal
Number of serially under-performing investment funds has increased by a fifth, survey reveals
- 1 Benedict Cumberbatch says Hollywood is better for black British actors: 'I think as far as coloured actors go it gets really difficult in the UK'
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 Warriors in ancient Iraq suffered Post-Traumatic Stress Disorder more than 3,000 years ago, say researchers
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village