Britain is still predominantly a nation of aspiring home-owners, constantly preoccupied with house prices and mortgage rates. But while home ownership is often the end goal on the horizon, for many, renting offers the best option for the here-and-now, as well as paving the road to joining the property ladder.
In this weekend’s Independent on Sunday, Chiara Cavaglieri asks, ‘So what’s so strange about renting a home?’ She points out that Continental Europeans don’t worry about the ‘dead money’ in renting and that it is in fact less hassle and more flexible than owning. Does this mean that that the attitudinal shift we are starting to see is going to gather momentum?
Steve Bolton, Founder and Chairman of Platinum Property Partners, commented in the article. He said: “Renting is much better suited for certain individuals – particularly young professionals who need to be mobile to follow the best job paths and who are not yet ready to settle down in one location. A ‘sharing’ culture is growing in the UK, with consumers increasingly happy to use sharing platforms for music and films rather than owning these outright. With house prices increasing rapidly, this culture has logically extended to housing – and living with others in Houses in Multiple Occupation (HMOs) is increasingly becoming the first port of call for many young professionals and key workers.
Using data from SpareRoom and property website Zoopla, Steve was able to calculate how much tenants could typically save by renting a room as opposed to paying a mortgage or renting a one bedroom flat alone. He found that the average cost of renting a double room in the UK ranges from £414 to £535 per month, depending on quality, and includes bills. This is less than half the cost of renting a one bedroom property (£928) before the cost of bills and also as much as 36% cheaper than the typical monthly mortgage repayment (associated with a 75% LTV two year fixed rate) on the same type of property - £645 per month.
Steve added: “Renting a high quality double room in an HMO with shared communal living space works out considerably cheaper than renting a one bedroom flat, especially when most, if not all bills are included. This allows consumers to save up more money each month without skimping on luxury, taking them one step closer to the eventual goal of home ownership. Even for those who aren’t currently thinking of purchasing their own property, it’s a cost effective and sociable way of living with likeminded people – and often enables people to live in a desirable area they would otherwise not be able to afford. For time-poor Generation Y, location is key and many would happily put off buying for a few years to rent in an area closer to friends, work and amenities.”
