Belvoir detects trend towards renting property
Dec 15 2009 by Henryk Zientek, Huddersfield Daily Examiner
A PROPERTY lettings agency says more young people are opting to rent their homes than buy.
Belvoir, which has offices at John William Street in Huddersfield, said more and more young people were following European rental trends .
It predicted that the UK property market will continue to head towards the European model – where it is normal for tenants, young and old, to rent rather than buy.
Chief executive officer Mike Goddard said: “Lives free of commitment have traditionally made young Britons the bedrock of the UK lettings market.
“However, in recent months we’ve been observing not only an increase in the number of young people renting, but a stretching of the boundaries as a growing number of ‘30 somethings‘ opt for renting long-term over home-ownership.
“Some put this shift towards European trends down to the collapse of the UK housing market, but in reality, the collapse merely accelerated a movement which has been happening for some time.”
Belvoir has a network of more than 140 franchisees stretching across the UK – and looking after a property portfolio valued at more than £1bn.
In 2001, Abbey’s annual Rent versus Buy Index found that by the end of a 25-year mortgage, homeowners were on average £135,000 better off than renters over the same period. However, by the time Abbey conducted its 2008 study, homeowners were on average only £5,811 better off and in some areas it was cheaper to rent. In London, for example, the average rent was £650 compared with an average mortgage repayment of £1,117.
“Although there are still big advantages to home-owning, the benefits of renting over a long period are becoming more apparent,” claimed Mr Goddard.
“Growing numbers of consumers are seeing varying mortgage repayments, legal fees, estate agent fees, stamp duty and repair costs as contributing to an uncertain future.
“Globalisation and world travel have also played a greater role in young peoples’ lives and as a consequence a greater need for mobility and flexibility is now required.
“The economic crisis of September, 2008, merely compounded this situation. When house prices dropped by as much as 30%, the increased affordability of property was offset by increasing deposits and the cessation of bank lending, which limited the number of first time buyers to the lowest level in modern times.”
Mr Goddard said the flight of migrant workers from Britain drove down rental pricesŠas UK landlords faced stiffer competition for tenants. Increased repossessions and rising unemployment combined with lower rental prices had tempted more young Britons into renting.