Generation rent

[This article was written in January 2015]
Over the last few weeks, my DH and I have spent many happy hours discussing the state of the UK economy and the world economy (as you can tell we live exciting lives). These discussions have tended to take place over a leisurely Sunday breakfast when we are padding around in our pyjamas. Over a smooth cup of freshly brewed coffee it makes for a relaxing yet stimulating start to the week!

Although neither of us has studied economics to any great depth, we both have a good grasp of certain key economic theories which I think has helped make our investment journey a more confident one. I would definitely advise anyone involved in property investing to study the 'Big Picture' and understand what the economic risks and opportunities are within the world today.

One discussion we  recently had was around what is often termed 'Generation Rent' - i.e. people who are unable to afford to buy their own property and therefore can only and possibly will only ever rent. [The phrase has also given rise to an active movement lobbying for more legislation to support tenants http://www.generationrent.org/]. However, I would like to widen the definition of this phrase to demonstrate that to a lesser or greater extent we are all generation rent - unless we take definitive action to change that status.

I still work one morning a week at the local University, which I regard as interesting, fun, and informative. I enjoy teaching and love the contact with students and I am passionate about my subject area (Early Years). So it is rather nice to find that also once a month I get a payslip and an accompanying deposit into my bank account. Aren't I being rented once a week by the University? And my car is on a PLP plan  (personal lease plan) that means I don't own it, but I can drive it nonetheless as if it were mine. And many of our buy-to-let mortgages are interest-only which means we are effectively leasing the properties to rent out to other people (the only additional benefit is that we get to keep any capital growth).

There are many benefits to renting. You don't have to take full responsibility for the capital item if it goes wrong or needs certain repairs. If you want an upgrade, its fairly easy to transact (yes you may have to pay more per month but that's the price of improvement). You can plan your finances much more easily and with certainty. There are a lot of benefits to renting. However, many people feel fearful and powerless when renting, They feel that they have few rights and no options. This is simply not true, particularly when it comes to housing. Let's face it, if you are in a job, you yourself are being rented by your employer! If you can use the situation to your advantage, I can see that being rented and being a renter may actually end up being a pretty savvy way to financial freedom!