• Privacy policy
  • T&C’s
  • FAQ
  • Meet the Team
  • About The London Economic
  • Advertise
TLE ONLINE SHOP!
NEWSLETTER
SUPPORT THE LONDON ECONOMIC
  • TLE
  • News
  • Politics
  • Opinion
  • Business
  • Sport
  • Entertainment
  • Film
  • Food
  • Lifestyle
  • Property
  • Travel
  • Tech/Auto
No Result
View All Result
The London Economic
  • TLE
  • News
  • Politics
  • Opinion
  • Business
  • Sport
  • Entertainment
  • Film
  • Food
  • Lifestyle
  • Property
  • Travel
  • Tech/Auto
No Result
View All Result
The London Economic
No Result
View All Result
Home Property

To rent or to buy? That is the question

 By Mark Coulter, Managing Director, Coulters  In 1918 homeownership was at a mere 23%, but this accelerated from 1953 and this was solidified further by Thatcher’s ‘right to buy scheme’ scheme in the early 1980’s. Britain has traditionally been a nation obsessed by property and house price inflation. Everyone has traditionally aspired to home ownership […]

Joe Mellor by Joe Mellor
February 23, 2015
in Property

 By Mark Coulter, Managing Director, Coulters

 In 1918 homeownership was at a mere 23%, but this accelerated from 1953 and this was solidified further by Thatcher’s ‘right to buy scheme’ scheme in the early 1980’s. Britain has traditionally been a nation obsessed by property and house price inflation. Everyone has traditionally aspired to home ownership and a rising housing market has a disproportionate effect on peoples feeling of wealth the direct health of the economy, and even perceived social status. Homeownership reached a peak in 2001 in the UK where 69% of people owned their own homes.

Since 2001 though that has changed, where a generation of younger would be buyers are bring put off purchasing by significant deposits, disproportionately punitive mortgage rates for first time buyers or those with smaller deposits and the realisation that the property market is a more of a life style and social investment rather than a monetary investment. Capital growth over the next decade looks at best from the majority of reliable commentators, modest and people are looking alternatively at renting.

By 2011 homeownership had fallen to 64% from 69% and I and many others would predict this will slide further in the coming years. The benefits of renting over buying particularly outside of the South East of England are obvious. The costs for purchasing are particularly front loaded; deposit, furniture, legal fees, mortgage fees, removal fees, initial maintenance are significant. What also has to be borne in mind is that if capital growth is modest and first time buyers are moving on average after only three years of purchasing they could be looking at a net loss after all of these outlays are factored into the sale, and also adding in the back loaded costs of estate agency sale fees and legal fees and potential mortgage redemption fees for early exit from a fixed term deal.

In Scotland the benefits for renting rather than buying particularly at a value in excess of £327,000 are obvious. The proposed changes of the UK wide SDLT (stamp duty land tax) namely LBBT (land and buildings transaction tax) are very punitive and are no doubt going to persuade a further section of the market that financially, renting makes more sense than buying. For example under current SDLT rules, which were further revised on the 4 December 2014, the tax on a purchase of £420,000 is currently £11,000, but under new SDLT rules that the devolved Scottish government is introducing on the 1 April 2015, the tax will increase to £19,600.

There is no doubt that the benefits for renting rather than buying are increasing and the ratio of renters versus buyer will decrease over the next decade. The real game changer though will come in the changing of legislation similar to other European countries like Germany where the percentage of people renting is closer to 90%. Under current legislation, home owners only have a protected tenancy for a minimum of six months, and coupled with this the housing stock in the rental market is generally of poor quality. If legislation is changed to give tenants longer term security, renting could easily become the default choice for the majority.

Interested in buying or renting a property? Click here

RelatedPosts

Cheapest Places to Live in London 2021

Escape to the country: Best Places to live 2021

As Covid-19 weighs on real estate market, could the Tories be forced to take action?

Escape to the country: Surge in city dwellers inquiring about homes in villages

Support fearless, free, investigative journalism Support fearless, free, investigative journalism Support fearless, free, investigative journalism

Subscribe to our Newsletter

View our  Privacy Policy and Terms & Conditions

Trending fromTLE

  • All
  • trending

What If We Got Rid Of Prisons?

Stress, fear and homelessness: The threat looming over families confronted with eviction

File photo dated 07/11/03 of a prison cell.

The Other Prison Pandemic

Latest from TLE

Euro Millions results Friday 5th March 2021

thunder ball results

Thunder Ball Results, Friday 5th March 2021

Pink Marmalade Gin

Pink Marmalade Gin: a natural, colour changing gin

Mail On Sunday ordered to print front-page statement on Meghan’s copyright win

About Us

TheLondonEconomic.com – Open, accessible and accountable news, sport, culture and lifestyle.

Read more

Address

The London Economic Newspaper Limited t/a TLE
Company number 09221879
International House,
24 Holborn Viaduct,
London EC1A 2BN,
United Kingdom

Contact

Editorial enquiries, please contact: jack@thelondoneconomic.com

Commercial enquiries, please contact: advertise@thelondoneconomic.com

SUPPORT

We do not charge or put articles behind a paywall. If you can, please show your appreciation for our free content by donating whatever you think is fair to help keep TLE growing and support real, independent, investigative journalism.

DONATE & SUPPORT

© 2019 thelondoneconomic.com - TLE, International House, 24 Holborn Viaduct, London EC1A 2BN. All Rights Reserved.




No Result
View All Result
  • Home
  • News
  • Politics
  • Opinion
  • Business
  • Sport
  • Entertainment
  • Film
  • Lifestyle
  • Food
  • Property
  • Travel
  • Tech & Auto
  • About The London Economic
  • Meet the Team
  • Privacy policy

© 2019 thelondoneconomic.com - TLE, International House, 24 Holborn Viaduct, London EC1A 2BN. All Rights Reserved.