More than one-fifth of renters in the UK plan to stay in the rental market permanently and never buy a house. That’s according to a new survey by residential rental company UNCLE. But why exactly are so many people shunning buying a house in favour of renting? Is renting ultimately better than buying? Let’s take a look.
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What is going on in the UK housing market?
The UK property market is enjoying a boom right now. House prices have risen by nearly 11% in the year to May according to the Nationwide Building Society.
The average price of a house is currently almost £250,000, with the average property deposit being £57,000. Of course, many people aren’t in a position to save such a large chunk of money.
Consequently, even with government initiatives like the mortgage guarantee scheme, which allows homeowners to get a mortgage with as little as a 5% deposit, and generous tax breaks like the stamp duty holiday, the dream of homeownership is slowly slipping away from many would-be buyers.
Paired with a relative shortage of homes for sale, for many, the best option is to rent a property.
Renting vs buying a house: What do the stats show?
UNCLE conducted a survey of UK residents to find out their views on renting, and how long they want and plan to rent for. They also looked at renters around the world to reveal the countries that rent the most.
In the UK, they found that more than one in five people (21%) plan to rent permanently. The most popular duration to rent is one to two years. Almost one-third (30%) of UK residents are planning to rent for this long.
Nearly a quarter (23%) said they plan to rent for three to four years, with 11% planning to rent for five to six years. A small percentage (2%) said they plan to rent for seven to eight years, and 6% said they plan to rent for up to ten years.
When it comes to the countries that rent the most, Switzerland leads the pack. Nearly two-thirds (61%) of the country’s residents are currently renting in the private sector.
Following Switzerland are Germany and Denmark, where 54% and 47% of residents are currently renting a house. The UK is ranked 10th.
The full findings of this survey can be found on the UNCLE website.
Why is it that so many people want to rent forever?
While it’s still the case that most people dream of homeownership, high prices mean that many are unable to do so. They are therefore likely to have to rent and save for longer than desired.
Aside from that, a sizeable proportion of current renters simply do not believe that owning a home is all that it is cracked up to be. This is especially true for renters of older generations.
In the survey conducted by UNCLE, for example, 17% of boomers (55-74-year-olds) and 15% of Gen X (40-54-year-olds) thought that too much importance is placed on owning a home. In fact, 19% of boomers said that they want to rent for as long as possible.
It’s also the case that 12% of both Gen Z (16-24-year-olds) and millennials (25-39-year-olds) agree that there’s too much emphasis on being a homeowner.
Ryan Price, founder at UNCLE, suggests that renting may be a good fit for some people in the post-pandemic world, where working from home has become more common. He says, “Over the last year, the one lasting legacy of the pandemic is the abolition of the negative stereotypes around ‘working from home’.
“Given the flexibility and fluidity the new ways of working offer, renting allows you to move freely and not be tied down to one area. It makes remote working and renting a perfect pair.”
Is renting a house better than buying?
There is no right or wrong answer to this question.
Ultimately, whether renting or buying a house is the better option will depend on your goals, preferences, work situation and, most importantly, your personal financial situation.
We understand that this can be a difficult decision to make. So, to assist you, we’ve created a renting vs buying guide. It clearly outlines the advantages and disadvantages of each so you can make the best choice for your circumstances.