Want versus have
It is no secret that Brits, on the whole, are property obsessed. Most dream of their own home and make steps to achieve this, in the meantime, watching property programmes and planning the colour scheme of their master bedroom. As perceived fore-runners in property ownership, it’s a strange reality that too few own the roof over their head.
Brits want to own their own home
The UK property market is always a topic for conversation. If it isn’t the current takeover of the buy-to-let section of the property market, it is the lack of affordable housing for first-time buyers.
Brits love the idea of home ownership, and, more than half of the population do own their own home. This started in 1971, where home ownership was more common than renting for the first time in the UK.
Continuing through the Thatcher years, this upward trend peaked in 2001, with 69 percent of the population owning their homes.
Since then though, there has been a decline, and figures now show at 64.8 percent.
These statistics are according to recent reporting by Eurostat.
So what is causing this decline?
The number of migrant workers in the UK has increased in the past decade, along with the rise in students, both of whom prefer to rent for more flexible terms.
There has also been a rise in buy-to-let property investment in recent years, due to the low interest rate and more disposable income, which has caused an imbalance in available and affordable property for purchase, something the government is, at least to some degree, addressing.
How the UK compares to Europe
The word on the street often refers to our “neighbours” in Europe as having a preference for renting, and certainly not the same focus on property ownership than the Brits do.
Alarmingly, then, that the UK fall 4th in the table against other EU nations. Here are some interesting statistics for a % of home ownership:
- Romania – 96%
- Lithuania – 89%
- France – 65.1%
- Netherlands – 66.9%
- Denmark – 63.8% – just 1% behind the UK
It is a strange reality that countries such as France are in fact higher up the property ownership ladder than the enthusiastic, bricks-and-mortar-loving Brits.
Outside of Europe the pattern continues, with Australia at 67.5%, despite their major property crash, Ireland sitting at 71% and even Greece is at 74%.
*statistics by Eurostat
What is the solution?
There are of course merits from having a large rental sector, yet despite differing opinions, property ownership trends appear to be falling too rapidly.
Putting a cap on buy-to-let activity could make some difference. Also, easing up property regulations that add layers of complication to home ownership and property purchase. Finally, something the government have on their radar, is creating more affordable homes for first-time-buyers using brownfield sites and empty high streets to name a few.
Another suggestion by Martin Lynn, The Telegraph:
“Why not re-introduce mortgage interest tax relief, abolished in the 1980s? That was the one policy that kick-started home ownership and it makes getting on the property ladder dramatically more affordable. True, it costs money. But owning property is what ties people into a free-market system. If we don’t work harder to promote it, the system will be in trouble – and that will make us all worse off”
Dental & Medical Financial Services are specialist advisers to doctors and dentists. We keep a close eye on property market trends and topics of interest.
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