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changing-face-of-the-rental-market-header - Essential Living

Changing the Face of the British Rental Market

Blog Guide to Renting
21.11.17

For decades, homeownership has been a widespread aspiration across Britain. It has been a deeply ingrained desire passed down through the generations. But with various challenges facing the housing market, and significant shifts in priorities from one generation to another, the times are changing.

Current trends in Britain are slowly beginning to resemble those of Germany, Austria and Switzerland, where long-term renting isn’t only the norm, but the preferred way of living.

The German Way

Although long-term renting is common practice in a number of European countries, Germany is setting the pace when it comes to increasing tenant power. 40% of German households live in the PRS (Private Rented Sector), compared to just 19% in the UK. And given the 93% of Germans reporting high rates of satisfaction with their current housing situation, it seems that Europe’s most economically successful country is getting it right once again.

Germany’s thriving rental market comes down to a number of factors. Firstly, there’s the security. Tenants need not dread annual renewal dates or snap evictions because the emphasis is on long-term renting. Most tenancies are indefinite and only in very rare circumstances can landlords begin the eviction process. Given this increased stability, it’s unsurprising that German tenants move considerably less frequently than Brits, with German tenancies averaging 11 years, compared to 2.5 years in the UK.

Secondly, rent increases are controlled through legislation, making it difficult for landlords to hike up rents year by year, and giving tenants peace of mind when it comes to renewals. The governmentally imposed restrictions mean rents can’t be increased by more than 20% over three years, and long-term rent contracts tend to protect tenants against potential increases over the course of their tenancy.

Thirdly, and perhaps critically, there’s the good supply of quality rental accommodation. In Britain, and particularly London, it’s not just the supply that’s lacking, but the quality of the accommodation leaves a lot to be desired. In Germany, the onus is very much on landlords to make any repairs or alterations quickly and efficiently. What’s more, at the beginning of a tenancy, properties are always redecorated for the incoming tenant. This bears little resemblance to the British market, where properties can host scores of tenants across numerous decades without being redecorated.

When there are disputes between the tenant and landlord, the tenant can look to the German tenants’ association, which supports them with help and legal advice in the case of an ongoing maintenance issue or deposit dispute, for example. All this makes for a rental market which is fair, functional and, above all, successful.

So, is Britain finally latching on?

Playing Catch Up

With house prices peaking and social housing in decline, the UK’s private rented sector is on the ascent. The flexibility and convenience of renting is attracting a new generation of young professionals, a generation that has a different set of values and priorities to previous generations. They aren’t putting down roots as quickly as their parents or grandparents did, and the option to move cities and even countries for jobs means renting suits their lifestyles down to a tee.

But despite the growing interest in the market, the UK still has a way to go to make PRS as successful as it is in Germany. More steps need to be taken to protect the tenant. This will come through an increased emphasis on long-term tenures, where tenants are protected against yearly hikes in rent. Pressure must also be placed on landlords to take more responsibility for timely building repairs and maintenance, as well as more regular refurbishment. One way of enforcing this could be through a more visible tenants’ association, which would support tenants in any legal disputes.

At Essential Living, we’ve taken a number of measures to set a new standard and drive these positive changes in the sector. We’ve disposed of all admin fees, from referencing and renewal charges to check-out and inventory fees, so your bank account isn’t drained before you’ve even moved in. Our dedicated residents’ team responds quickly and efficiently to all maintenance issues, so you’ll never be left in the dark when it comes to repairs. And as a long-term investor, we’re proud of our commercial incentive to keep residents for as long as possible.

This is all part of our mission to change renting for the better, and bring the UK up to speed with its continental counterparts.

 

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