German-style tenancies to benefit millennials who will never own homes

German-style tenancies to benefit millennials who will never own homes

A third of youngsters currently in their 20s and 30s will never own their own property, while half are likely to still be renting in their 40s. But is this necessarily a bad thing? Maybe the UK could take a leaf out of continental Europe’s book…

New data compiled by thinktank the Resolution Foundation has revealed that, based on how homeownership levels have fallen since 2000 and how trends have changed towards the private rented sector (PRS), a third of today’s millennials will still be renting when they hit retirement.
[crb_image link=”” image=”” align=”left”]
The group also demonstrated how the number of families with children living in privately rented homes has soared in the past 15 years, from 600,000 in 2003 up to 1.8 million as of 2016 – a figure which is likely to have further ballooned since then.

While Jeremy Corbyn has suggested implementing rent control in order to curb rises and enable people in the PRS to save more money towards the ultimate goal of homeownership, this proposal has been criticised by some who believe it will only stifle the market.

“At a time of demand for private rented homes massively outstripping supply, rent controls will cause the sector to shrink,” said David Cox of the Association of Residential Letting Agents (ARLA). “In turn, this means professional landlords will only take the very best tenants and the vulnerable and low-income people that rent controls are designed to help will be forced into the hands of rogue and criminal operators, who may exploit them.”

How we could copy Germany with longer tenancies

Owning a property has long since been seen as the ultimate goal for people in the UK, which makes the current figures appear all the more concerning – but in places like Germany, Switzerland, the Netherlands and many other parts of Europe, long-term and even lifetime renting is par for the course.

Resolution Foundation is calling for the UK to bring in continental-style tenancies, similar to the “indeterminate tenancies” recently introduced in Scotland, which makes contracts open-ended and provides more security for both the tenant and the landlord.

How do we know it works? Well, in Germany, most tenants will stay in their homes for an average of 11 years – in the UK, renters move on after just two and a half years. The added stability for tenants, as well as the minimal void periods affecting landlords, are just some of the major benefits of such a system.

Removing insecurity for tenants and landlords

“While insecurity in the private rented sector is often seen as an acceptable risk when childless, the disruption it can cause to schooling, friendship groups and support networks once young people have a family is clearly less than ideal,” said Resolution.

“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation.”

“That means raising standards and reducing the risks associated with renting through tenancy reform and light-touch rent stabilisation.”

Despite the efforts being made across the UK to build more homes, as well as stamp duty cuts for first-time buyers helping many more people onto the ladder, the thinktank believes there will still be more people than ever renting “from cradle to grave”.

Improvements made to the private rented sector now will help tenants as well as landlords, and it seems this is something the UK will have to face and embrace, while accepting that the old homeownership aspiration is becoming a thing of the past as people embrace the benefits of renting, like their European neighbours.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT