10 Dec 2018 3 min read

Housing history: is the UK a nation of owners or renters?


Roll back the clock far enough and the majority of the population rented, not owned, the homes they lived in. As the mix of tenures shifts in composition once again, what can the history of housing tell us about the future?  


Housing is important. We live in it (obviously); it is a vital part of our identity. As the biggest single purchase typically made in a lifetime, housing is a key indicator of consumer confidence and wider economic health.

There are many commonly-held beliefs about British culture, not least that we are an obsessive nation of home owners. I remember a journalist telling me that any article on house prices was guaranteed to generate the day’s highest readership rate; the ultimate clickbait!


But did you know the UK is historically a nation of renters?

If we roll back the clock to the early 1900s then 90% of the population lived in privately-owned rental accommodation, according to the Department for Communities and Local Government (DCLG). It wasn’t until the (relative) economic stability achieved in peacetime, followed by politically-driven initiatives such as ‘Right to Buy’, that the composition of housing tenure changed in structure. The advent of ‘Buy to Let’ mortgages in the 1990s heralded the return of the private landlord and an uptick in renting (this time without the slums and outside bathrooms).

Research produced by the House of Commons last year estimates that 20% of the UK population now live in rented accommodation

Alongside the physical changes in housing design since the 1900s, there has also been a more cerebral shift. Renting is no longer considered a 'residual choice': many people now rent because they want to, not because they have to because there no other options.

This lifestyle choice is being reflected in resident profiles within rental buildings that often have the broadest of cohorts – people aged from 0 to 70, students to retirees and everyone in-between.

However, the recent decades of buy-to-let activity have created a highly fragmented rental sector; around 70% of these homes are owned by landlords with portfolios of fewer than 10 properties (source: DCLG). Many are converted built-for-sale homes, lacking professional management.

The Build to Rent (BTR) sector has the potential to disrupt this outdated model

It is a distinct product, with different physical and operational characteristics compared to the traditional buy-to-let and build-to-sell markets. Schemes are often large, multi-let blocks and ancillary services in single ownership. Importantly, these blocks are built specifically for renting. Scheme managers ensure units are designed to meet tenant needs with an operationally-efficient specification and centralised, professional management.

So what does this mean for the future of housing? Homes England estimates that England needs 300,000 new homes per year to meet demand. Through the release of the Housing White Paper in 2017 and the forthcoming National Planning Policy Framework it has been acknowledged by government that institutionally-held BTR homes can make a significant contribution towards reaching this target.

If we now roll the clock forward into the long-term horizon, I do not believe the UK is going to go full circle back to being a nation of only renters (or home owners, for that matter). The aspiration is that we will be living in communities that encompass rented, owner occupied and affordable accommodation; a composition aligned with the needs of the local population. Importantly, units will be agnostic: affordable homes will be indistinct from those available on the open market, for example. Flexible design will also blur the lines between schemes designed for general occupation and those for later living or specialist requirements.

Would you like to hear more? Then listen to Hetal and me in conversation with Mark Chappel from LGIM’s Communications team on LGIM Talks, our new podcast.

LGIM Real Assets manages build to rent schemes.


LGIM contributors