Why Are More People Choosing To Rent Than Buy Their Property?

Why Are More People Choosing To Rent Than Buy Their Property?

The way we think about homeownership is changing. Buying a home used to seem like a natural step for the great majority of people, but it is now anticipated that by 2025, more than half of individuals under the age of 40 would be living in private rented housing. Renter demand in the United Kingdom is 43 percent greater than the previous five-year average.

So, what is causing this shift, will it continue, and how will it affect landlords? Is choosing to rent the new normal?

Choosing To Rent: The Advantages

One of the main reasons many people are choosing to rent is because the rental property market, which was historically plagued by rumours of unscrupulous landlords and exorbitant rates, has matured and is now viewed as a more progressive market that meets people’s requirements. Renting is seen to be desirable because:

• Unlike homeowners, you do not have to stress about property upkeep
Renting a property is simpler and faster than buying one.
• It is less expensive financially; a smaller investment is needed, monthly rent might be less than a mortgage payment, and there is no house insurance, solicitors’ fees, or stamp duty.
• Tenancy terms can be tailored to individual requirements, making it simpler to prepare for a future transfer.
• More rental market rules mean renters have more legal protection.
• There is no risk of falling into the negative equity trap.

Barriers To Home Ownership

People’s capacity to own a house has had perhaps the most significant influence on the rental market. Many people, especially the younger generation, are unable to get a foot on the housing ladder. According to some estimates, up to one-third of millennials will never purchase a house, while the other half will rent into their thirties. This isn’t solely due to the difficulties of saving for a deposit. High property prices result in higher mortgage repayments, making it more difficult to get a mortgage. Tighter lending standards also make it more difficult to obtain a mortgage. In some cases, then, it’s not that they are choosing to rent, but that they have to.

Unstable Personal Finances

The increase in property prices is exacerbated by income stagnation while the cost of living rises. Even if the funds were available to purchase a house, many people are turned off by the impression that the housing market is volatile and may trap them in a property that no longer meets their requirements.

People are changing their lifestyle choices, including more social living, for a variety of reasons, including financial concerns or a broader shift in society values. Searches for UK-based co-living rental options have increased by 4000 percent in the past four years, and the build to rent industry continues to develop, providing renters with an intriguing choice.

Prospects are high for landlords and brokers who have well-managed homes to sell and who listen to their tenants’ requirements and the market. Renting is seen as an exciting alternative to buying, with the promise to provide something more in line with how people live and work today.

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