About Waymark Chartered Surveyors and Estate Agents

“Is the balance between owning and renting your home changing?”

Posted on Wednesday, September 4, 2019

“Is the balance between owning and renting your home changing?”

The main reason behind this is affordability, not just in the cost of buying a house as a proportion to earnings, but also in the charges which are levied through SDLT (Stamp Duty). Whilst the cost of a monthly mortgage has probably never been cheaper (often more so than the rent for an equivalent home) finding the 5% or more deposit on the ever higher house prices and the stamp duty, requires a lot of hard earned cash which many can find hard to find.


Central government have struggled to deal with the affordability for many years, always promising to deliver more and more homes in the forlorn hope that more homes means lower prices but in practice this has never happened.  So they introduce nil stamp duty to first time buyers and 20% Help to Buy on new homes. The result? Still higher prices and the mainstream housebuilders posting huge profits.


So renting continues to be a low entry cost option for those still saving for their deposit, or simply wanting the flexibility renting a home can give when changing jobs and moving into new areas. It also remains the only option for those who might struggle to secure mortgages due to credit history or lower salaries. 


So, in accepting the inevitable, the government is trying to improve the supply and control of the rental market. This is happening in two ways. It is encouraging financial institutions to invest in large scale developments which are for lease only, making this an acceptable investment proposition. On the control side, and somewhat perversely, it is simultaneously discouraging the private buy to let landlord by, for example removing tax breaks and adding in a 3% surcharge over and above normal stamp duty levels.  (We have our own views on why this is the case but that would fill another article!) 


Another way government is reacting is in the current review by the government in  AST’s – assured shorthold tenancies which are the standard basis of renting. The review is out for consultation until October and largely centres around removing the ability of a landlord to terminate a lease unless under certain prescriptive grounds – much like we have had with commercial tenancies for many years. By doing so they are looking to give tenants greater security, understand that for an increasing number, renting is no longer a short term stop gap until buying. 


Are we to be worried about this? No; in our view it should be embraced. Any reasonable protection for tenants from having to keep moving home must be a good thing.  But instead of penalising those who see buy-to-lets as a sensible alternative pension planning, they should be encouraged. It is after all the way of things to come.


Edward Preece MRICS


Subscribe to our mailing list

* indicates required