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 woodchip 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’ so lots of them bought their own home. However, owning often makes less financial sense and and the rate of home ownership is now reducing as there is now no stigma at all to renting.
In fact, of the 215,822 households in Edinburgh, 37,121 rent their homes from either the local authority or a social provider, a further 48,992 rent from private landlords and 2,374 are lucky enough to live rent free. This means that, in total, 88,487 households in Edinburgh are rented meaning that 41% of Edinburgh people are tenants.
The idea of home ownership is deeply embedded in the British psyche: in fact, 59% of Edinburgh households are owner occupiers (or 127,335) although this level is lower than across the whole of Scotland where 62% are owner occupier.
Housing is at the heart of Government policy, as John Swinney has promised to oversee the building of tens of thousands of new properties a year so first-time-buyers can buy their first home and John Swinney & Philip Hammond between them have changed the tax laws for buy-to-let landlords in Edinburgh and across the wider UK.
To get votes, Thatcher (and everyone since) ran election campaigns promising everybody their own home and, as a country, we seem to equate home ownership as the main goal of British life. However, there has been a shift in this prevailing attitude recently.
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, home ownership could be affecting your health. The UK, according to Bloomberg, is only the 21st healthiest country in the world. Germany is at No.10 and Switzerland at No. 4 and home ownership is at 52.5% and 44% respectively in those countries— and in the UK and Scotland as a whole it’s 64.8% and 62% respectively.
In Edinburgh , 75.6 % of homeowners who own their house outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale, 5.3% said their health was ‘bad’ or ‘very bad’.
Looking at renting, the census splits tenants renting properties in Edinburgh into two types:
68.9% of Edinburgh local authority/social tenants said they were in ‘very good’ or ‘good’ health and 10.9% were in ‘bad’ or ‘very bad’ health, whilst ‘private rented tenants’ in Edinburgh were the healthiest, as 90.3% of them described themselves in ‘very good’ or ‘good’ health and only 2.5% were in ‘bad’ or ‘very bad’ health.
I am not suggesting that low home ownership rates in Switzerland and Germany are directly linked to health, nor, do I expect Brits to all go to Berlin, Interlaken or Dusseldorf and realise how happy people are when they don’t need to worry about all the stresses with accompany home ownership.
The numbers for Edinburgh 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 home ownership in recent years has been a function of monumental rising house prices. Edinburgh landlords have seen this, too.
Now that’s come to an end, it‘s hard to see why anybody would want to buy? Renting is here to stay in Edinburgh and it‘s growing incrementally each year.
Even with the new tax rules for property landlords in Edinburgh, buy-to-let is still a viable investment option for most people in the Town.
There has never been a better time to purchase buy-to-let property in Edinburgh, 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, and speak to property experts in Edinburgh.
To keep up-to-date with the rented property sector in Edinburgh, visit my property blog here.
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