That number surprised you didn’t it? With the General
Election done, I thought it time to reflect on renting in the manifestos and party-political
broadcasts and ask why?
As the best way to tell the future is to look at to the
past, so we decided to look at the number of people who rented a century ago
(1920’s), and surprisingly 76% of people rented their home in the UK (as renting
then was considered the norm). Yet in the latter part of the 1920’s, builders
of the suburban housing estates with their bay fronted semis started to sell
the dream of home ownership to smart renters.
Up until the mid 1920’s, the mortgage had been seen as a
millstone around your neck. Now, due to some clever marketing by those same
builders, it was started to be seen as a shrewd long-term investment to buy
your own home with a mortgage. It fuelled the ambitions and goals of the up and
coming well-to-do working class who reclassed themselves as lower-middle class.
Meanwhile, the Government encouraged (through tax breaks) people to save in
Building Societies whom in turn lent the money to these up and coming new homeowners
thorough mortgages.
Roll the clock
forward to the decade of the young Elvis, Chuck Berry, and Bill Haley (1950’s)
and still 72% of Brits rented their home. Homeownership had boomed in the
preceding 30 years, yet so had council house building. Then, as we entered the 1960’s and
1970’s homeownership started to grow at a higher rate than council housing.
The
rate of homeownership started to drop substantially after the mid 1990’s, and now
we roll the clock forward to
today, there is no stigma at all to renting ... everyone is doing it. In fact,
of the…
245,072 residents of Southampton, 113,085 of you rent your house
from either the council, housing
association or private landlords - meaning 46.1% of Southampton people are
tenants. Yet read the Daily Mail, and you would think the idea of homeownership is deeply
embedded in the British soul?
127,659 Southampton
people live in an owner-occupied property
(or 52.1%)
So, we have a paradox - homeowners or renters? The reason I suggest
this, is, I noticed on the run up to the Election that housing was used in the
General Election as a way to get votes. This is nothing new, as all parties
have always used housing to get votes, although previously it was about which
party would build more council houses in the 1950’s through to council Right to
Buy with Thatcher (and everyone since) - running election campaigns promising everybody their
own home in one way or another.
Yet,
did you notice at this election something changed? The parties weren’t talking
so much about increasing homeownership but about protecting the tenant. It seems
the link between homeownership as the main goal of British life is starting to
change
as we are slowly turning to a
more European way of living. Renting is here to stay in Southampton
and incrementally growing year on year. You see, in Britain there is
no property tax based on ownership, which many other western countries
have. Instead Council Tax is paid by the occupier of the home
(meaning the tenant pays - not necessarily the owner).
Both parties wanted to end no-fault evictions (which is a
good thing), yet Labour went further and mentioned rent controls in their
manifesto. As I have mentioned before in other articles on the Southampton
property market, rents since 2008 (even in central London) have not kept up with
inflation - so again was that another headline to grab votes/election bribe? The
fact is the majority of new British households formed since the Millennium can
now expect to rent from a private landlord for life - therefore the parties
focus on this important demographic.
Yet
even with the new mortgage relief tax rules for landlords and the 200+ pieces of
legislation that govern the private rental sector, buy to let is still a viable
investment option for most investors in Southampton. There has never been a
better time to purchase a buy to let property in Southampton
… but buy wisely. Gone are the days when you would make a profit on anything
with four walls and a roof. Most importantly do your homework, take advice and
consider your options.
If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email.
If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.
Email me on brian.linehan@belvoir.co.uk or call on 023 8001 8222.
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