Fewer People Are Renting in Western Europe

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Since the 1980s there have been significant changes in the choices people are making in whether they wish to rent or own their house, flat or apartment. In the early 1980's West European countries averaged between 50% and 60% of homes owner occupied as opposed to rented. However as years progress into the early 2000s there have been some very significant changes with most countries seeing a significant reduction in the number of properties rented. Some of the most significant changes in the percentage of properties rented in Western Europe are:

From 1980/81 to 2001/02

UK from 42% to 30%
Luxembourg from 39% to 26%
Netherlands from 58% to 46%
Spain from 21% to 11%

One possibility for this trend is the increasing standards of living combined with market changes improving the choice and availability of financial products to purchase properties. However also to be considered is the very significant differences when comparisons are made across countries. Below is a summary of the most recent data found on the percentage of homes rented for each country.

Austria 40%
Belgium 31%
Denmark 51%
Finland 32%
France 40%
Germany (ex FRG) 55%
Germany (ex DDR) 66%
Greece 20%
Ireland 16%
Italy 25%
Luxembourg 26%
Netherlands 46%
Portugal 21%
Spain 11%
Sweden 39%
United Kingdom 30%

One possible conjecture is that countries with a higher percentage of property in the rental sector may have higher workforce mobility. For example Germany may have significantly higher workforce mobility, in contract Spain may have relatively low workforce mobility with only 11% of properties in the rental sector.

The data available on property to rent across Western Europe raises many questions however one factor very evident is the definite trend for a shift from rental to owner occupied homes. For landlords and real estate letting agents who have properties to rent this may also suggest that competition will increase to find tenants. However there are other factors to consider such as the type of rental property.

For example the UK rental sector can be split into three main categories, these are Council (e.g. Government owned), Housing Associations (often charitable trusts) and Private (e.g. private landlords and investors). In 2003 the Private sector accounted for 35% of rental properties in the UK, and this percentage is increasing as more people invest in private rental property.

Overall it is difficult to draw precise conclusions however taking the UK example there are some specific factors, firstly overall rental housing has reduced significantly from the 1980s when it was 43% of total housing to 2005 where it was around 30% of housing.  Secondly there has been an increase in private rental properties, particularly within the last 10 years.  The private sector now accounts for nearly 40% of rental housing and almost 10% of total housing in the UK, around 2.4 million homes.  This increase in the private rental market has understandably led to the proliferation in services such as http://www.simple2rent.co.uk to support private landlords and letting agents.  One of the questions for private investors to consider is what are the future prospects for the housing market?  Simple2rent.co.uk is publishing further articles to explore this area.

 

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