Universal home ownership is a political dream that that is thought to be the answer to Britain’s housing crisis. Isaac Tabner, a senior lecturer at the University of Stirling writing for The Independent in February 2017, believes that universal home ownership is not the solution. He says that renting should have a large part to play in the government’s housing policy.
Tabner recognises that there is political pressure for people to own their own home, but argues that in many cases it makes more financial sense to rent, rather than the government encouraging people to take on a mortgage debt that they can hardly afford.
Tabner says that houses can be a risky investment. Mortgage rates can go up, making it more difficult to afford the repayments, and house prices could fall, resulting in negative equity. House prices over time tend to rise, but Tabner recommends that if you intend to live in a house for less than five years, it may be safer to rent.
Isaac Tabner wants to see the government do more to encourage renting. The Residential Landlords’ Association (RLA) feels that the government is doing the opposite by discouraging landlords from expanding their rented property portfolio through the raising of stamp duty and lowering the tax relief on commercial mortgage interest payments.
David Smith of the RLA said:
“The current tax policy will be counterproductive in making rents affordable and increasing supply to meet the growing demand. It is time for the government to think again.”