Home: does it Mean Rent or Own?

The concept of home: what is it?

Has our perception of home become so inextricably connected with ownership that we've lost sight of what a 'home' is? I would argue that we have been so focussed on ownership at all costs that we now see ownership as a form of investment. A nest egg as opposed to a nest.

Should we use the term 'home' any more? Is it meaningless in the face of our mindless celebration of positive HPI? Rather like celebrating global warming as an opportunity for an all-year-round tan. Do we care about those reaching up to climb the thorny ladder of ownership when we, homeowners, care only that we see our investment climb inexorably in value as we do nothing except sit on our comfortably upholstered behinds and wait for the HPI security blanket to grow ever larger, ever warmer...

Way back following the end of WW1, and I won't go into the political imperatives, when ownership was at 15%, policies were aimed at creating 'mini-capitalists' giving people a stake in their country by encouraging homeownership. The concept of home was deliberately conflated with 'own'. It has been ever since.

But do owners really think of their homes as a 'home'? Or is it just another asset? An investment accumulated along their carefully calculated timeline of life.

Irresponsible and lax mortgage regulation has seen eye-watering amounts of money lent to people who, in the real world, should not be able to get themselves so horribly indebted. LTV's at 95% leaves no wriggle room for downturns. New build's that lose value the moment the key is turned in the latch and the threshold crossed, mortgages based on salary multiples of up to 8X or more and, in some cases, extended beyond a term of 25 years.

HTB throws petrol on the fire of HPI enriching no one except housebuilders. All of which has led to hyper HPI and an affordability crisis.

At some point soon this financial legerdemain will have no more tricks up its sleeve and the music will stop. The Boomers have benefitted from HPI. We are the X Men of unearned wealth. So despite the lure of bricks & mortar riches, don't expect Gen' Y & Z to do so well.

The focus has been on ownership at all costs. One of those costs has been the notion of 'home' as a home.

It's possible to argue that renters have a clearer idea of what a home means. They're not in it for the investment. Nor do they have any significant interest in their crib other than solely as a place when they can hang their hat. A refuge.

I was raised in a council house. Never for one moment did I consider it anything else other than a home. As a kid, you need a safe place. A sanctuary. And that's what I had. Some neighbours had lived their whole lives as council tenants. Tenure wasn't a criterion by which we judged each other. Cycling backwards sitting on the handlebars carried far more kudos than having parents that owned a house. As a 'grown-up' (sic) I've rented and owned. Both fairly recently, and I have never felt one was less of a home than the other.

Except for the stigma.

It's not the renters that are incapable of feeling at home in a rental, it's the system that treats them like unwelcome guests being expected to follow arcane house rules by someone who doesn't live with them. I've seen written on one of the many BTL landlord websites "My house, my rules" As if the tenant is some hormonal teenager returning home way after the agreed hour.

And why should one's status be diminished because one pays rent to someone who looks after everything, rather than a lender who looks after nothing? Especially now that renting is being rationalised by the pioneers of Build to Rent.

Build to Rent isn't about 'raising the bar'. Who would want to indulge in some bizarre form of reverse limbo dancing when the framework is so obviously broken. Build to Rent is about tearing up the rules, ignoring petty convention and creating homes for people to stay in for as long as they desire; have your pets, decorate to your heart's content, paint your bedroom purple... it's your home. And that's the point. It doesn't have to be your asset to be your home. Despite what some may (still) say. It's worthwhile looking at Homeviews to see what renters are saying about the homes they rent, the operational management and the landlords they rent from. It doesn't make for the usual gripe filled reading.

As renting becomes easier and frictionless, thanks to technology and innovative prop-tech firms like Howsy, the concept of the home becomes clearer. Unfettered by HPI angst, a mortgage millstone, insurance, maintenance, knackered boilers, ill-behaved appliances and, in some instances, service charges and ground rent, renters can focus on their nest. Their home.

So perhaps renters, both in the PRS and Social Rented sector, really do have a much better idea of what home means. Perhaps, not being on the ownership hampster wheel, they have a better deal.

Richard Berridge. October 27th 2020.