Home owners are more happy than those who rent, research suggests
People who own their own home are generally happier than those who rent but in the UK the divide is the more marked compared to the rest of Europe, new research has found.
Fewer than half UK renters are happy with their situation compared with 80% of home owner while in the rest of Europe it is 57% and 77%, according to the survey by Dutch bank ING.
ING said that this may be linked to affordability and a less well developed renting market which makes it more difficult for people to find a suitable home in which to feel secure as those renting in the UK find it difficult to pay their housing costs compared to people with a mortgage.
According to ING senior economist Ian Bright the UK housing market as a whole presents unique challenges. ‘The rate of house construction is the lowest in Europe, which results in a persistent mismatch between levels of supply and demand and the situation in London is particularly acute. All in all, many of those looking to buy a house are left wondering if they will ever get on the housing ladder at all,’ he said.
The survey of consumer attitudes to homes and mortgages asked people across Europe as well as the United States and Australia about housing affordability, how people meet their housing needs and how happy they are with their housing situation.
In the UK, despite prices having risen incessantly over the past years just 54% consider homes expensive, a smaller proportion than the 60% recorded across Europe. Even though people are finding house prices expensive, few believe prices will fall and 40% believe that house prices will never fall.
However, the UK and Australia, where prices have been rising fast in recent years, have the highest proportion of people believing that this price escalation might be reaching an end. ‘A situation like the one described above, with many also seemingly prepared to ignore the possibility of falling house prices, is potentially dangerous from an economy wide and individual perspective,’ ING said.
The Czech Republic and the Netherlands are the only European countries where fewer than half of respondents agreed that house prices are expensive at 47% and 49% respectively. At the other end of the scale, 89% of people in Luxembourg and 80% in Turkey are most likely to say housing is pricey.
But people in the UK do not necessarily feel trapped by their housing situation. The survey found that 38% of British people said they had been forced to stay in their current home because of rising prices compared to 50% across Europe. However this varies largely from country to country from a 37% in Germany to 73% in Romania.
Location is the reason most often cited for expensive housing followed by an increasing population, level of interest rates and a perception that there are just not enough houses being built. But there is variation between countries. In Luxembourg and Turkey, for example, population pressures are cited more often than location as a cause of high house prices.
The top reason in Poland is a lack of houses being built, with location in second place. In Spain and Italy, high taxes are more commonly cited than in other countries as a reason for expensive housing and Italy has the largest share who point to rules about modifying property as a cause of expensive house prices. People in the US and Australia respond very similarly to people in Europe to this question.