Increasing numbers of Britons who cannot afford to buy homes or prefer the flexibility of renting mean the UK housing market will grow to resemble that of Germany, where more than half of the population rents, according to estate agency Belvoir Lettings.
The UK group, which runs a network of more than 200 franchised letting agents, said demand for rented property in Britain remains “high”, despite efforts by the government to boost home ownership and reduce incentives for buy-to-let investors.
Despite schemes such as Help to Buy, Belvoir remains confident that demand for rental properties in the UK will remain robust. Unveiling a 25 per cent increase in full-year profits to £2.2m for 2015, the group said the government’s efforts do not so far appear to have had any “negative impact”.
A 3 per cent stamp duty surcharge for people purchasing a buy-to-let property or second home came into force this month. This is one of several measures unveiled by UK chancellor George Osborne over the past year in response to concerns over the growth of so-called generation rent. This term covers people, particularly younger Britons, squeezed out of the property market amid high prices, poor wage growth and burdens such as student debt.
“Housing in the UK is moving more towards its European counterparts where in Germany, for example, over half of the population chooses to rent rather than own a property,” the company said.
Mike Goddard, Belvoir chief executive, argued there was a lot of “hype” around the desire of “generation rent” to get on the property ladder. Many young people are choosing not to buy their own homes, he said.
“The hype is you have got to live in the house you own. I don’t think the younger generations think like that,” Mr Goddard said. “The flexibility and ease of renting is greatly to their advantage.”
Rival estate agency Savills forecast in a recent report that demand for rental accommodation would rise by 1.1m households in the next five years, despite government pledges such as building an additional 400,000 homes by 2021.
Mr Goddard founded Belvoir with his wife, Stephanie, in 1995. The Lincolnshire-based group charges franchisees an upfront fee of £22,500 to cover costs such as training and 12 per cent of their annual revenues in management service fees. In the year to December 31, management fees rose 25 per cent to £4m, partly boosted by the acquisition last year of two other estate agency franchises, Newton Fallowell and Goodchilds.
In 2014/15, 14.3m properties in the UK were occupied by owners, 4.3m were privately rented and 3.9m were rented in the social housing sector.
Shares in Aim-quoted Belvoir were up more than 16 per cent at lunchtime on Monday at 107.5p.
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