Why do we dream of homeownership?
It’s what we do in the UK – we dream of owning bricks and mortar. It’s seen as a badge of stability, security and success. It’s become part of our culture that we pity the poor renter who can’t afford to buy. Maybe one day they’ll have the deposit saved and will be able to join the ranks of those saddled with a mortgage and a huge pile of responsibilities.
Hmmm? Saddled? Responsibilities? Why do we cling to a homeownership ideal when for many people it isn’t the ideal way to live?
Rebuilding a nation
For an answer to that we need to look at the situation after the Second World War when the UK had a severe shortage of affordable homes. The government launched a massive housebuilding programme. They wanted to create a society where every family had access to a decent home and provided financial assistance which allowed many to own their homes for the first time.
While it began as a solution to a housing crisis, homeownership quickly became a marker of social status. Owning a home was seen as a way of putting down roots and establishing oneself in a community. As a result, many people were willing to take on substantial debt to purchase a home.
Seven decades later …
Decades later, people are still doing it. And that’s despite the high cost of homes and the difficulty of obtaining a mortgage from cautious lenders. Saving for a deposit is a major undertaking, especially in an era of rising living costs, stagnant wages and insecure employment.
Perhaps because it’s no longer easy to own your own home, more and more people are questioning the wisdom of it. They are starting to prioritise other financial goals, such as paying off debt or saving for retirement.
In 2023, many find that the old homeownership dream just doesn’t fit their needs. Renters enjoy flexibility and freedom that homeowners do not. They’re not tied. They can move whenever they want. They don’t need to worry about the costs and hassles of maintaining a property or whether they’ve bought in the “right” postcode area. They don’t lose sleep over falling property values or negative equity.
Another benefit of renting is the lower upfront costs. Instead of having to find a substantial downpayment, often tens of thousands of pounds, renters usually only have to pay a security deposit and a few months’ rent in advance. While it can still be a stretch, it makes renting a more accessible option, especially for those just starting their careers who may not have much of a savings pot.
The culture is changing. Millennials and Generation Z want greater flexibility in their lifestyle choices. Renting suits them. They can move cities to chase career opportunities or start a new life chapter without having to sell a property. To them, bricks and mortar aren’t an asset. They’re a problem that can hold them back.
Financial stability, flexibility and bags of great features
Rather than craving the status of home ownership, people now want financial stability and flexibility. Renting can provide both, and landlords are responding by offering more flexible tenancy agreements, better amenities, and higher-quality rental properties. The trend is driving competition in the rental market as landlords and developers try to get ahead. We’re seeing all of the following:
- Flexible tenancy agreements with relatively short notice periods, ideal for the younger tenant pursuing career or other life opportunities.
- High-end amenities offered by developers: gyms, rooftop terraces, communal workspaces, on-site restaurants and cafes.
- Improved energy efficiency with consequent reductions in both utility bills and carbon footprint.
- Smart home technology, including thermostats and keyless entry systems.
- Co-living spaces which offer both a sense of community and the chance to share some living expenses.
- Rental guarantee schemes which give tenants added financial security and are particularly helpful for the self-employed or those with unstable incomes.
As renting continues to grow in popularity, we’ll see more of these ideas, more appealing rental properties and deals that suit a whole range of diverse tenants’ needs.
And once that’s done, fewer and fewer will be losing sleep over an outdated homeownership dream.