AtHomeWithSarahBeenyAutumn2016 - 51

G E N E R AT I O N R E N T ▲ THE Swedish way WORDS: DAVID CROZIER, IMAGES: GETTY IMAGES Sweden, like the UK, is a nation of homeowners - but rather than encouraging speculation and fuelling house-price rises, everything is geared to ensuring house prices rise very slowly. In Stockholm, the housing shortage is as acute as in London - but elsewhere in the country, prices are incredibly affordable. Swedes tend not to move very much and part of the reason is the way homes are taxed when sold. A homeowner pays 22% capital Germany, Switzerland or Belgium, long-term contracts and more flexibility give tenants the chance to plan for the future. Not only that, but in Germany getting a mortgage can be very difficult, normally requiring a deposit of 20% and proof of good earnings over several years. Germany's tax regime is not particularly favourable for buying property either, all of which explains why less than half of Germans own their homes - and in the capital, Berlin, it's just 14%. It's a similar picture in France, where if you buy a house, it's because you want to live in it not make gains tax on the profit of any sale and, if you re-mortgage, you have to pay 2% tax on the loan. First-time buyers, however, are at a significant advantage in Sweden. Whole blocks of apartments serve as Swedes' first step onto the property ladder. The difference is that you don't actually buy the apartment; you buy a shareholding in the building, which grants you access. When you leave, you sell the shareholding, which rises in value just like a house would. As for buy-to-let, it's practically non- a few euros out of it. And you can't mortgage yourself to the hilt, either - there are laws in place to prevent it. The main reason, it seems, that we Brits prefer to buy is because, historically, rents rise far more dramatically in the UK than elsewhere in Europe. In Germany, rent increases on existing contracts are capped at 20% over three years - following a first year where no increase is permitted. SOLUTION? A recent report by lettings network Countrywide reveals rents in the UK have risen by 27% in the same period, outpacing a 16% growth in incomes. existent in Sweden. Because of the tax rules, the only way you can make buy-to-let work is not to buy but 'construct' to rent, which is encouraged. So you have to build a block of flats with the sole intention of letting, rather than buying up old homes to rent out at a profit. In order to keep rents affordable and fair, they are charged on a fixed price per square metre. The aim is to make sure rent does not exceed 25% of average after-tax income in Sweden and that rents don't rise faster than other prices. Indeed, a single working person aged between 22 and 29 now spends 48% of their post-tax salary on rent for a one-bedroom home. The average cost of renting a onebedroom home in Britain is £746 per month; £1,133 in London. Campbell Robb, chief executive of Shelter, says: 'With rents like these, no wonder people on ordinary incomes are locked out of buying a home. 'But it doesn't have to be like this. The government has the power to turn our housing crisis around - but only if it starts investing in homes that people on ordinary incomes can actually afford to live in.' www.athomemagazine.co.uk OCTOBER 2016 | 051 http://www.athomemagazine.co.uk

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