Which is better, renting or buying?

Did you know that before the Second World War in Britain not many people owned their own home? For example, in 1918, 77% of property was rented and this is the norm for most countries. However, a dramatic shift occurred and by the 1980s, home ownership far outnumbered the number of tenants.

This is partly as a result of government policy in 1980 for the ‘Right to Buy’ of social housing for citizens. After the Second World War, which devastated many areas, there was a great need for redevelopment and to encourage investment in providing social housing. Social rentals accounted for 25% of all households in England by 1961 but home ownership was also growing during the 1950s as wages began to rise.

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Home ownership peaked in the 1980s, but as a result of the 1989 Local Government and Housing Act, it was no longer deemed necessary for local councils to hold housing stock, which resulted in a decrease in the number of people renting socially and saw the rise of the private landlord.

In the UK, the dream for most people is home ownership, with rental accommodation often seen as the poor relation. People might say it’s ‘wasted money’ because no there is no purchase of equity for future investments. However, renting isactually the preferred housing choice in some European countries, including Germany. As Germany is one of the most successful European economies, when Brits are struggling to find a mortgage, do they perhaps have the right idea? The dream of home ownership isn’t going anywhere soon, so when you’ve found the property of your dreams, be sure to find a great Conveyancing Solicitors Guildford too. Visit a site like Sam Conveyancing for Conveyancing Solicitors Guildford.

This does not mean that the rental price is significantly cheaper in Germany, as in some developed cities, young professionals can spend up to half their monthly income on rent. However, not getting on the property ladder does not seem to bother the young Germans as it does the Brits. And it is this attitude that is reflected in the housing market. While in Britain, house prices have nearly doubled in the last decade, in Germany they have only risen slightly at 3%.

Renting is a big business in the cities of Germany with 90% of households being rentals in Berlin. More rural areas such as the Saarland have a higher home ownership rate at about 60%. The reason for the low home ownership in Germany could be that the tax system is not very geared towards helping homeowners and very tight lending conditions, which may make it almost impossible for many young people.

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Long term renting is, understandably, much more common in Germany and there is a wider choice of properties and the monthly cost is slightly cheaper than similar homes in the country. Germany does not enjoy the housing boom experienced in the UK and traditional home ownership was seen as risky for the German people.

Ownership in the UK has risen to a peak of 69% in 2001 but has been slightly declining since. The percentage of rented households increased in all areas of England and Wales between 2001 and 2011, with London having a mix of about 50% of rentals and home ownership. With the continued high property prices and difficult lending conditions, private renting is again on the increase with many areas suffering from a shortage of properties available to let.