The number of people living in privately rented accommodation is continuing to increase, with the numbers in Edinburgh well above the Scottish average.
The proportion of adult children in Scotland still living in the parental home – up to one quarter – has been increasing since 2002, with the proportion becoming particularly pronounced over the past five years, according to figures released by the National Office for Statistics.
This and similar statistics are often accompanied by an unchallenged assumption that all of these people are “trapped” in rented accommodation. In some cases this may well be true, and I fully support any practical moves to help our young people realise the dream of home-ownership. However, these statistics surely also suggest that the time has come for politicians to be bold and create the conditions that enable the financial institutions, working along with Scotland’s house-builders and property agents, to offer rented homes as a desirable alternative to owner-occupation.
A generation ago, it was not uncommon for couples (or even single men and women) to have become first-time buyers before reaching the age of 25, with more than two-thirds of their lives on average in front of them. No doubt many of today’s stay-at-homes still have an aspiration to buy but for the increasing numbers who are not flying the nest until well into their 30s, long-term renting may be a better option than owner-occupation.
There are thousands of private landlords here in Edinburgh, and across Scotland, doing a terrific job in satisfying a housing need and were it not for them, even more adult children would still live at home with mum and dad because the shortage of rented accommodation would be even more acute.
Consequently, what is required is a new beginning which makes renting a home a long-term – perhaps a life-time – option for our people. If the politicians supply a level playing field and this leads to the financial institutions projecting a reasonable return from funding rented housing, a major, nationwide development programme – leading to the construction of family homes as well as flats for singles and couples – is likely to follow. This in turn will provide economies of scale on the administration of these properties that will filter down to the consumer, making renting not just more affordable, per se, but also in comparison with owner-occupation.
But affordability is only one of two likely benefits. Even in the case of longer-term leases, tenants will have much greater freedom to upsize, downsize or move house because of a new job. That sounds the opposite of “trapped” to me.
At one end of the home ownership scale young people starting out on their careers, and on a modest budget, could be required to put down £10,000 (and perhaps more) as a deposit on a modestly sized Gorgie Road or Leith Walk flat, with legal and ancillary costs on top of that. The deposit on a similar rented property will be closer to £500 and this is returnable at the end of the lease, assuming there are no damage issues.
It seems to me that someone thinking of buying their first home close to the age of 40 should also have the option of an affordable rental alternative, given that the mortgage is unlikely to be paid off until at least the age of 65 which, as everyone knows, was until recently the official retirement benchmark.
Finally, my own business interests cross house sales and lettings so I do not have a vested interest in talking down home ownership in favour of renting. Owner-occupation is likely to remain the first tenure choice for a majority of the population – in Edinburgh as elsewhere – but it seems only right that future generations deserve a wider choice of housing tenure than the present one.
David Alexander is managing director of the letting and estate agency, DJ Alexander.