If property rental trends in Europe are changing, how will this impact private landlords?
Over the last couple of decades there has been a major shift in the decisions people are making in whether they wish to rent or purchase their house, flat or apartment. In the early 1980s Western European countries averaged just over 50% of homes owned and occupied as opposed to renting. However as the years progressed from the 1980s there have been some dramatic changes with most countries seeing a significant fall in the number of homes rented. Some of the most significant changes in the amount of homes rented in West Europe from early 1980s to early 2000s are:
Netherlands from >57% to around 46%
UK from >41% to around 30%
Luxembourg from >38% to around 26%
Spain from >20% to around 11%
Possible theories for these significant changes include; Higher standards of living which have resulted in greater ability to purchase a home; The very considerable choice and availability of financial products to purchase properties; People seeing the purchase of their own home as an investment for their retirement and future family inheritance.
But these are just some of many theories that you can read about. Also to consider are the huge variations when comparisons are made between countries as shown here (percentages of homes in the rental sector):
Germany (ex DDR) 66%
Germany (ex FRG) 55%
Denmark 51%
Netherlands 46%
France 40%
Austria 40%
Sweden 39%
Finland 32%
Belgium 31%
United Kingdom 30%
Luxembourg 26%
Italy 25%
Portugal 21%
Greece 20%
Ireland 16%
Spain 11%
Quite an interesting list? Whilst these figures may seem surprising please note that this data is based on solid research. So why are there such variations?
One possibility for these significant variations is that countries with a higher percentage of properties to rent may have a more mobile workforce. For example this would suggest that Germany (ex DDR and FRG) may have significantly higher workforce mobility than other West European countries. In contrast Ireland and Spain may have relatively low workforce mobility.
The data available on property to rent across countries in Western Europe prompts many questions and possible conjectures however one factor that is very evident here is the definite trend for more owner occupied homes.
For letting agents and private landlords who have properties to rent this may also suggest that competition to find tenants will intensify. But also to consider is the type of rental property. For example rental sector housing in UK can be split into three main categories; these are Council, Housing Associations (typically charitable trusts but also with private ownership) and Private (private investors and landlords). By 2003 the Private sector accounted for over one third of rental properties in the UK, and there has been and increasing trend as more people invest in the rental market.
From this brief article we do not attempt to provide definitive answers to the changes in the rental property market however looking at the UK, which is the market Simple2rent supports, there are some specific factors to consider. Firstly rental stock has reduced significantly from the early 1980s into the 2000s. Secondly there has been an increase in private rental properties, particularly within the last 10 years. A question to conclude - is it the UK Government's 'tacit' policy to shift rental market support from the public sector to the private landlord?
Article produced by http://www.simple2rent.co.uk , UK's free service property website for landlords, letting agents and tenants.
