The Pros and Cons of Home Ownership and Renting Explored…
Renting used to be a dirty word in the 60’s and 70’s. You either lived in a ‘Rigsby Rising Damp’ style bedsit with wood chip on the wall and a coin operated electric meter (that buzzed in the night) or you lived in a council house. In the latter part of the 20th Century, the British were persuaded that rent payments were ‘wasted money’. However, owning often makes less financial sense than renting and as the rate of homeownership is starting to drop substantially, as we roll the clock forward to today, there is no stigma at all to renting .. everyone is doing it. In fact, of the 116,177 residents of Colchester, 44,050 of you rent your house from either the local authority/social provider (ie council house or housing association) or private landlords – meaning 37.91% of people in Colchester rent.
The idea of homeownership is deeply embedded in the British soul, in fact 70,766 Colchester people live in an owner occupied property (or 60.91%). Housing is at the heart of Government policy, as George Osborne has promised 200,000 new properties a year so first time buyers can buy their first home whilst recently changing the tax laws for buy to let landlords. To get votes, Thatcher (and everyone since) ran election campaigns promising everybody their own home, and as a country, we seem to equate homeownership the goal of British life.
So as more and more people are renting nowadays, are we turning to a more European way of living? Well, I believe, as a country, we are. In fact, homeownership could be affecting your health! The UK, according to Bloomberg, is only the 21st most healthy country in the world. Germany is at No.10 and Switzerland at No.4 and homeownership is at 52.5% and 44% respectively in those countries (in the UK it is 64.8%).
In the Colchester Borough Council area, 73.04% of homeowners who own their house outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale, 6.22% said their health was ‘bad’ or ‘very bad’. Looking at Colchester rent stats, the census splits tenants into two types – 71.14% of Colchester local authority/social tenants said they were in ‘very good’ or ‘good’ health and 10.38% were in ‘bad’ or ‘very bad’ health …
… whilst ‘private rented tenants’ in Colchester, were the healthiest, as 89.37% of them described themselves in ‘very good’ or ‘good’ health and only 2.61% were in ‘bad’ or ‘very bad’ health
I am not suggesting that low homeownership rates in Switzerland and Germany are directly linked to health, nor, do I expect Brits to all go to Berlin, Interlaken or Düsseldorf and realise how happy people are when they don’t need to worry about all the stresses which accompany homeownership. Colchester rent numbers do go some way to back up the argument (and they are the same across the whole of the UK). Nonetheless I do think that substantially all of the upside to homeownership in recent years has been a function of monumental rising house prices. Now that’s come to an end, it’s hard to see why anybody would want to buy?
Colchester Rent Outlook
Renting is here to stay and in Colchester rent stats are growing incrementally each year. Even with the new tax rules for landlords, buy to let is still a viable investment option for most people in the Town. There has never been a better time to buy buy to let property in Colchester, but buy wisely. Gone are the days that you would make profit on anything with four walls and a roof. Take advice, take opinion, do your homework.
If you’d like a second opinion on an investment property you are considering or just to have an informal chat about any aspect of the Colchester property market please feel free to call me on 01206 862288 or email: firstname.lastname@example.org
I’m happy to provide free feedback free of any obligation. If you send me the hyperlink to the property from Rightmove or Zoopla I will usually respond within 24 hours. I am also happy to undertake free pre-purchase visits to your short list of potential properties to provide a rental valuation.