Renting is not a second class choice but how do we improve that choice
Tuesday, March 03, 2015 by
In the same breath commentators report home ownership is down to its lowest in a generation they mention that those living in the PRS sector are at a high point. Somehow that always seems to imply that renting is a second class option. Your view on that would depend whether, like the Government seems to, you look at your home as a piggy bank. Repeated raids have resulted in SDLT levels that are a tax on mobility as any observer of transaction levels will tell you. If you combine increasing difficulties in getting a mortgage with recent wage stagnation it’s no great surprise that renting is gaining ground.
Assuming supply is of a satisfactory standard and quantity renting offers real benefits the most obvious of which is the ability to easily move where the work is. The quintessential British entrepreneurial spirit could also be a beneficiary; property is not the only form of investment out there.
This all presupposes though that we are going to have an orderly and well run increase in PRS supply. We should be looking to Germany where pension funds and large scale investors have an excellent reputation as landlords offering solid long term rentals and investors a sustainable return. Millions of European renters feel anything but second class but that’s because their Governments have laid the foundations over many years.
Somehow the discussion on investing in PRS has been hijacked by focusing on buy to let landlords as if there’s something grubby about it. Given the increase in the sector we should be happy but the answer lies in fresh thinking and a longer term view, and we all know politicians struggle to look beyond the next election. Could the affordable housing and commuted payments that developers give to Councils be split between providing PRS and affordable housing for instance. At the moment PRS builders are failing to compete with build to sell developers and a way needs to be found around this.
We shouldn’t be afraid to learn from our European partners and we certainly shouldn’t feel second class just because we choose to rent.
This article was originally written for CityAM