UK rental attitudes are changing, how is it stateside?

By
Services for Real Estate Pros with Globrix

In the UK we have a site called Gumtree, it's a lot like CraigsList...an online classifieds site with ads from dating to house sales. Gumtree recently published a report examining today’s British rental market. The findings were very interesting and I'd be interested to hear if you think there are similarities with your markets.

According to the study, half of Brits (51%) believe the national obsession with getting on the property ladder is old fashioned and needs to change. Over two thirds of 25-44 year-old renters (71%) are not planning to take a mortgage at all and will invest their money in other ways, and three-quarters of Brits (76%) wouldn’t buy property now even if they had the cash burning a hole in their pocket. Four in five renters (81%) can’t currently afford to buy, but they are content and want to continue renting for the foreseeable future.

The study also examined a year’s worth of historical data for London and five other large UK cities and found a shift towards a more ‘European attitude’ to renting, which is good news for landlords. In cities such as London, Edinburgh and Bristol the study found rental revenue increase by up to 7.8%. These findings reflect the opinion of over a third (35%) of landlords questioned who are optimistic about the rental market and believe their property will make them more money before the end of the year.

Renters looking for affordable properties should head to Manchester and Birmingham where urban development has contributed to a drop of up to 3.5%, as supply of outstrips demand. Gumtree’s Rental Index further reveals letting markets in Leeds, Bristol and Edinburgh to be slightly more neutral, with rents rising modestly or remaining static, yet to feel significant effects from the current property fall-out.

Property expert Michael Holmes had this to say…

“Until now renting has always been a bit of a dirty word in the UK. The importance of owning a house is deeply engrained in the British psyche and it’s our equivalent of the American dream. But in the new economic climate we’re seeing a real shift in attitudes towards a more continental approach to property, with renting becoming increasingly popular.”

Is it time to get rid of the stigma of being a renter? No matter where we are in the world?

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Rainmaker
630,067
Don Rogers
Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes
Keller Williams Realty Chesterfield

Poppy,

I think that you just may be on to something here, the stigma of renting.  Although it may be a "dirty" word there will be those that would much prefer to rent, could it be because they don't want the hassles of what it takes to be a home owner?  And is that all that bad?

The downside is that a renter will be paying higher rents because of supply and demand and never be building their own wealth no matter how slow the market may be. IMHO

BTW, have you ever been to Mendenhall?  I was at the Air Base there way back in the day and enjoyed it very much.  Never made it to London though.

Don R.

July 16, 2008 06:05 PM
Rainmaker
1,002,783
Charles McDonald
REALTOR®, Blogger, Principal Broker®, Owner
Charlottesville Real Estate Solutions

That is amazing. I can tell you from experience that my Real Estate investments are the best I have ever made. what a shift in attitude....

Your Friend in Charlottesville!

July 16, 2008 06:28 AM
Rainer
135,448
Melody Botting
Melody Botting Real Estate Network

The families involved in foreclosure are going to have to live somewhere.  Renting will be 'in'.

July 16, 2008 08:30 AM
Rainer
34,748
Poppy Dinsey
London, UK
Globrix

Don - There was an interesting article debating the fact that for the first ten years of a mortgage you're actually just paying interest, so you may as well rent and then put extra money into non-property investments. The writer made a pretty good case.

Charles - I know a lot of people are still benefiting from RE investments. My family certainly are.

Melody - We'll definitely see a shift in renting being 'acceptable' for professional adults IMO.

 

July 16, 2008 09:41 AM
Rainer
274,098
Adam Waldman
Realtor - Long Island
Westcott Group Real Estate Company

POPPY - I've found that a number of people have chosen to rent because they think that the market is going lower.  The problem is that they rely on this information from the national media, and they don't look at the local trends.  I have a feeling that a lot of them are going to regret this decision in the next year or so.

July 16, 2008 12:54 PM
Ambassador
1,245,262
Norma Toering
Palos Verdes Homes in Los Angeles Area
Charlemagne International Properties

Poppy - I've noticed my childrens' age group (23-33) are not interested in purchasing real estate.  They're getting their advanced degrees, traveling and job hopping which does not lend itself to buying a house in the suburbs. 

 I bought my first home when I was 24--the economy has something to do with their delay, but I think life priorities are changing.  The younger generation considers the world their backyard!

July 16, 2008 04:03 PM
Rainmaker
291,777
Kathy McGraw
Riverside County CA Real Estate
CELLing Realty

Poppy- I find that interesting.....and I for one don't think everyone should be lumped into the "buy" mentality.  Renting has its good and bad points.  I don't know about there, but when I rented I had some very good landlords, and some horrible ones.  Owning just gives me the freedom not to have an Idiot Landlord, as well as the tax benefits.

July 17, 2008 10:25 AM
Ambassador
1,530,629
Gary Woltal
Assoc. Broker Realtor SFR Dallas Ft. Worth
Keller Williams Realty

Poppy, no stigma about being a renter here. Shoot, must people are darn near proud that they found a roof over their head and out of the storm that is the economy. Renting also fits if you want to be mobile or don't know for sure if you will stay in an area or haven't found that dream home yet. It also fits those that can't qualify to buy based on low credit scores.

July 20, 2008 08:59 PM
Rainer
4,298
M Starr
Stephen Noah

Some people I know view renting with the same attitude they have when leasing a car. They always want to trade in for a new model or neighborhood every few years. I guess it is a matter of lifestyle, knowledge and/or ignorance.  I know people who are afraid to own because ownership assigns them the responsibility of taking care of everything instead of blaming someone else when a maintenance issue comes along. There are just too many variables to push people into one or multiple categories of reasons why or why not. Trying to track the trend seems useful and interesting... but its such a dynamic flow of information.

July 21, 2008 08:50 AM
Rainer
22,125
Karyn Smith
Remax Marketplace

Hi Poppy,

I am also from London but now live in the USA - when I cam to the States for the first time 30 years ago I couldn't believe how wonderful the rental apartments are so that changed my mind about owning (at that age). We just don't have the great rental communities that the USA does in the UK - I wish we did I am sure it would have been a whole lot more fun.

 

August 04, 2008 11:37 AM
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Rainer
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Poppy Dinsey

London, UK
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