For years, society and the housing market sold us the dream of owning our own home. It’s been drilled into us as a desirable and inevitable milestone in life. We’re taught to see ownership – even with an eye-watering mortgage propping it up – as a solid symbol of success, and, in some cases, that there’s no acceptable alternative.
We have an obsession about home ownership – independent social research by NatCen into British attitudes toward housing has shown that 86 per cent of people would choose to buy rather than rent their home.
While we’ve focused on becoming the proud kings and queens of our own castles, the rental market has stagnated, haunted by crumbling Victorian properties creaking at the seams. Rental properties are envisaged as being for the poor – and only the poor. Meanwhile, in markets like North America and mainland Europe, long-term renting is not only acceptable but favourable to house ownership. In Las Vegas, half of households rent according to real estate site Trulia. Official statistics reveal that in Germany, only 46 per cent own their own homes.
With a strong community of renters, these countries have steamed ahead with innovative and highly popular rental solutions, with long term security and none of the stigma; a popular choice being ‘build-to-rent’ developments owned by a single party, built to be rented. The UK has only just ventured into this sector.
Every year 700,000 Londoners move. This couldn’t happen if they were shackled by mortgages.
Once, this might not have been so important – but times are changing. Deposits are high, mortgages harder to secure; in cities like London, it’s cheaper overall to rent than buy according to recent reports. With millennials increasingly changing jobs and location, people are beginning to enjoy the flexibility renting offers. In London alone, 700,000 people move every year – this wouldn’t be possible if they were shackled by a mortgage and PwC research suggests that 60 per cent of Londoners will be renters by 2025.
So we need to start putting the renter first, introducing more choice to the market. Essential Living recently became the first to pave the path with the opening of Vantage Point – a luxury build-to-rent development of 118 apartments near Archway. The apartments come fully furnished, residents have access to a gym, games room, office space, lounge and communal dining area, along with many other perks.
In general, as build-to-rent developments are owned by large developers, they also typically only require small deposits, charge minimal admin fees and can be trusted to be reliable, transparent, and service-oriented.
Build-to-rent doesn’t just benefit renters – it’s also a smart choice for property developers. Unlike most conversions, which don’t efficiently use space, build-to-rent developments have high capacities and be quickly constructed; Archway Tower (previously the dark and monolithic DSS building) was bought by Essential Living for just £6m in 2013 and transformed into Vantage Point in just two years. This meant sizeable financial gains for the developer.
The speedy construction and capacity of build-to-rent properties has already caught the government’s eye as they look to hold a housing crisis at bay. With a new Private Rental Sector taskforce in place, and millions being set aside in funding for investors and developers, the message is clear. It’s worth noting that when similar measures were put in place in the US, build-to-let units boomed to 450,000. Not that we have as much space in the UK, but it does suggest that build-to-rent properties might become a familiar feature of many city skylines in the coming years.
The market is primed and ready – UK renters are demanding more flexible, high-quality housing and the government is making preparations to meet them. Now we need the disruptors waiting in the wings to take to the stage and help put the UK property sector back on equal footing with the rest of the world.
Ultimately, long-term renting needs to be seen as a desirable lifestyle choice, not a punishment.
Aidan Rushby is CEO of Movebubble