Time to rethink homeownership?

Firstly, according to figures released by HouseSimple, the government is set to miss its housebuilding manifesto pledge by 84,000 homes.

Meanwhile a second study by Legal & General has revealed last time buyers now own almost £1 trillion of UK housing stock in the UK. Legal & General’s research shows that of the last time buyers who had considered downsizing in the last five years but didn’t, 49% said it was because there were no suitable properties available, with a further 29% stating that the properties that were suitable were too expensive.

It’s clear the problems affecting the housing market cover the whole spectrum of buyers. And while house building continues to be cited as the solution (albeit one that is not yet being realised), perhaps we should be thinking of alternatives too. Perhaps it’s time we rethink renting?

It’s long been the European way, yet here in the UK we still have this view that renting is somewhat ‘less’ than buying. That it’s the consolation prize, never the ambition.

One reason for this is the long-running view that renting is “throwing away money”. Yet a recent study by Stirling University has questioned this assumption. Led by Dr Isaac Tabner, the study revealed homeowners who sell up within five to ten years are likely to lose more cash through buying than if they had rented.

According to the study, on average homeowners need to own their own home for 10 years before returns from the rent they are no longer paying begin to compensate for the buying costs.

I’m by no means suggesting that we put an end to the dream of homeownership, but rather we take a different view of renting and start to accept that there are two acceptable forms of tenure and renting could well be the ideal solution for many people.