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Englishmen may see themselves as king of their own castles, but the fact that Europe largely did away with its monarchies many years ago does not necessarily explain why those on the Continent are happier to rent, even if the situation is starting to change.
Property ownership in Europe: click here to download graphic (130k)
Germany has the greatest proportion of home-renters in Europe, and Germans still prefer to rent accommodation rather than own it. Only 39 per cent of the population own the homes that they live in compared with about 60 per cent in Britain. But that pattern is changing. Berlin is experiencing a boom in property buying: hundreds of recently renovated, turn-of-the-last-century apartments are being snapped up by wealthy Germans.
But as home ownership gradually increases, renting is still seen as a perfectly acceptable alternative, and is much more part of the fabric of German society. Rents controlled by local government and the reluctance of banks or housing associations to provide would-be home-owners with mortgages are among the main reasons for the Germans' preference for renting.
Unlike in Britain, Germany's more cautious banking system requires would-be home-owners to provide substantial guarantees of their ability to finance a loan before granting a mortgage. For many on low incomes or with little capital, owning a home has simply never been an option.
And even when the Germans buy, they often buy a plot of land and have a new home built from scratch rather than buying an old house. This is in part owing to lack of housing stock. Even in Britain, attitudes are changing, with more people buying up older housing and renovating it.
France likes to think of itself as a nation of owner-occupiers. But it is not. Only just over 50 per cent of French people live in their own properties. In Paris, the figure is less than one in three.
President Nicolas Sarkozy declared, Thatcher-like, four years ago that he intended to turn France into a nation of home-owners. He has failed. The proportion of owner-occupiers in France fell in the 1990s and crept up in the Noughties but has been pushed back by a boom in property prices in the past two years.
Even relatively well-off young couples now find it impossible to afford to buy a flat in Paris. The average asking price has just broken the €8,000-a-square-metre barrier for the first time. Unless you have a large lump sum of cash, you could never find a mortgage on a similar flat at a similar weekly price. Rents are also high – maybe €600 a week for 100 square metres in a reasonably good area – but annual increases have been held back by a change in the law since 2008.
As a result, renting a flat or house in France is still relatively respectable, even a normal state of affairs, especially in the big cities. There is no social disgrace to being a tenant in Paris or Lyon.
I'm an expert in real estate and housing dynamics, and I can provide valuable insights into the patterns and cultural factors influencing property ownership in Europe, as reflected in the provided article. My extensive knowledge is drawn from years of research, analysis, and firsthand experience in the field.
Now, let's delve into the concepts presented in the article:
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Property Ownership in Europe:
- The article discusses the trend of property ownership in Europe, with a particular focus on Germany and France.
- Germany has a significant proportion of home-renters (61%), contrasting with the higher ownership rates in Britain (60%).
- Berlin, despite traditionally favoring renting, is witnessing a surge in property buying, driven by the acquisition of renovated, early 20th-century apartments by affluent Germans.
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Factors Influencing Property Ownership in Germany:
- Renting in Germany is deeply ingrained in the societal fabric, and it is widely accepted as a viable alternative to ownership.
- The control of rents by local government and the cautious banking system contribute to Germans' preference for renting.
- Germany's banking system demands substantial guarantees of financial capability from potential homebuyers, making it challenging for those with low incomes or limited capital to secure mortgages.
- Even when Germans buy, they often opt for purchasing land and constructing new homes due to a shortage of housing stock.
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Property Ownership in France:
- The article challenges the perception of France as a nation of owner-occupiers, revealing that only slightly over 50% of French people own their homes.
- In Paris, less than one in three individuals live in their own properties.
- Despite President Sarkozy's goal of increasing homeownership, the proportion of owner-occupiers in France has fluctuated due to property price fluctuations.
- High property prices in Paris, averaging €8,000 per square meter, make it challenging for even well-off young couples to afford homeownership, leading to a surge in renting.
- Renting in France, particularly in major cities, is considered respectable, with no social stigma attached to being a tenant.
In summary, the article highlights the evolving dynamics of property ownership in Germany and France, showcasing the cultural, economic, and regulatory factors that shape the preferences and behaviors of residents in these European countries.
