Renting v Owning: A 2012 Tipping Point?

Property journalists and anoraks - er, sorry, I mean analysts - love the figures from surveys 'proving' home ownership to be cheaper or dearer than renting. These stories come up several times a year and inevitably throw in a hackneyed comparison between the UK's previous high level of home ownership and Germany's legendary pro-renting market for good measure too.

So far, so predictable. The problem is, the surveys' results tend to disagree with each other, typically look only at short term comparative costs, and are often skewed to favour the interests of the companies which commission them.

Instead, what are the more influential and independent signs of a real shift from ownership to renting? I am not providing answers but this blog does instead suggests some benchmarks to look out for:

1. Will there be a genuine, large-scale private rented sector 'development and investment' category emerging? If the PRS is expanding permanently as many residential analysts forecast, this 'build to let' industry should begin to appear soon - maybe 2012?

2. Will there be a genuinely totemic 'landmark' statistic showing the PRS not only expanded but serving as a positive choice of tenure for large numbers of people? Perhaps that will be in 2015 when, if Jones Lang LaSalle is correct, there will be more PRS tenants in Greater London than there will be mortgage-holding owner occupiers.

3. Will there be estate agencies not only opening lettings departments - as many previous sales-only operations have done since 2008 - but perhaps closing their sales divisions in order to concentrate on what they regard as the faster-growing, longer term lettings sector? Stand by for an announcement from one agency in the spring - it will make a surprise leap into lettings-only operations.

4. Will the mainstream property press, until now seeking only owner-occupier and buy-to-let investor readers, begin to run rental stories? Will there be pieces on the best places to rent, on how to get the best deal from a landlord and managing agent, or what rent increases (or falls) tenants may see in the future?

Until these tangible and durable signs appear it may be harmless enough to debate the 'which is cheaper?' surveys.

But those surveys may also be missing the point. Young generations may now be deciding to rent not because it's cheaper at one point in time but because renting does not saddle them with a mortgage, maintenance and ownership of an asset which no longer looks like it will make money in the long-term future.

Watch for those signs.

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