Jane Devine: Home owning obsession creates crisis

HOME ownership levels have fallen to the lowest levels since 1987, with just 65 per cent of people owning their own home in the UK. People, particularly young people, are finding it hard to raise enough of a deposit to buy their first house.

More and more people are turning to the private rental market to find a home; and this, apparently, is a crisis.

It’s not a crisis in many other countries in Europe, and it’s not a crisis in Japan or the United States. It would appear to be a peculiarly British crisis because of our national obsession with home ownership.

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I don’t understand why as a nation we seem to believe that to rent your home is somehow a lesser status than to own your home, especially as most people are just renting from the bank anyway. Renting your home can be a better option for all sort of reasons: flexibility, cost, or work patterns, to name a few.

Owning your own home used to be about being able to retire without having to worry about bills, but at least a third of the country have always paid rent in retirement and with pensions being slashed and retirement ages rising, it may not be so compelling an option anymore.

Besides, this obsession is a fairly recent thing. It was the introduction of the Right to Buy legislation, brought in by the Thatcher government in the 1980s, that saw home ownership levels soar and established it as a national aspiration.

But, it’s not as easy to buy your own home any longer. Bank lending criteria is much more stringent and the level of security required on a mortgage is much higher. The reaction from government however, fuelled by our national obsession, is to look at ways of getting people a “foot on the property ladder” instead of making sure that whatever tenure people are in, they are protected.

Whether out of choice or necessity, renting is becoming the best option for many of us and government needs to do more to protect private renters. Yes, they have set up the Landlord’s Safety Deposit Scheme to protect tenants from landlords who try and hang on to deposits; and, yes they have stopped letting agents charging prospective tenants exorbitant fees. But, there is still one thing they need to resolve: all people, whether renting or buying, want the same thing from their home – security.

That is what is lacking in the rental market in Scotland. Most leases are for six months and then on a rolling, monthly basis after that. Even in the first six months there are ways that landlords can get round the tenancy agreements and reclaim their property, leaving tenants to look elsewhere.

In Europe, five and seven-year leases are common, with much more emphasis on tenants’ rights, which is probably why in Germany only 39 per cent of people own their own home. In Berlin 90 per cent of people rent and yet no-one is calling it a crisis there.