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The self-storage boom: lifestyle choice or indictment of UK housing crisis?

UK housing crisis

Lock-ups are being reinvented and marketed as more than just storage amid overcrowding and record rent rises.

Forget the gym membership and juicing regime: the new must-have to boost personal wellbeing is a self-storage unit.

At least, that is the call from a new company urging space-squeezed thirtysomething renters to accept that they cannot afford a home with enough cupboards in today’s housing system and instead sweep their clutter into a rented lock-up.

Hold, which is opening five storage sites in London, is trying to persuade householders that spending £270 a month on a lock-up is a lifestyle choice with the potential to “promote feelings of calm and relaxation” and even boost mental health.

The marketing gambit comes as figures show more than 100 storage complexes have opened in British towns and cities in the past three years, and that the sector now generates £1bn a year in revenue. Increasingly, the facilities offer communal areas, hot desking and creative studios to make them a more palatable extension of home.

But the Generation Rent campaign group has now warned that far from being a lifestyle choice that could boost wellbeing, the storage boom should be seen an “indictment of our housing crisis”.

“Self-storage warehouses sprouting everywhere … won’t come close to solving our problems,” said Ben Twomey, Generation Rent’s chief executive. “Homes are the foundations of our lives, so a storage container might be the perfect metaphor for how government inaction is leaving renters out of sight and out of mind.”

New self-storage space equivalent to more than three Canary Wharf towers – or about 6,000 two-bedroom flats – has been opened in the UK in the past year, according to an industry report from the real estate firm Cushman & Wakefield. The sight of storage complexes opening close to small newbuild flats is fast becoming one of the darker ironies of Britain’s struggle to supply enough housing.

This growth in storage sites is being driven by record rises in private rents and increasingly cramped housing; more than 500,000 rented households in England lived in officially overcrowded homes in 2022. The average UK rent increased by 9.2% in the past year, according to the latest figures from the Office for National Statistics, the equivalent of an extra £1,300 a year on the average rent in England.

Overcrowding often means children sharing bedrooms with adults, and sometimes beds with one another; more family arguments; teenagers struggling to do their homework; and damage to physical and mental health, a survey by the National Housing Federation found.

UK housing crisis
A hold self-storage facility in north London. Photograph: Graeme Robertson/The Guardian

“People are living on top of each other and it’s fundamentally unhealthy,” said the founder of Hold, Frederic de Ryckman de Betz, who said he had previously found homeless people trying to live in units. “Separation is very important.”

Hold tells potential customers: “The system has let us down; leaving many of us feeling trapped as we get outpriced and squeezed out. It’s a fact: less space leads to a lower quality of life. How we feel about our personal and work space is deeply connected to our wellbeing. We all need more room to breathe, live, and grow.”

The location of Hold’s first branch, on a north London street that has been described as the “golden mile” of self-storage owing to the large number of new sites, embodies that system failure. It stands on the boundary of the boroughs of Camden and Islington, where average monthly rents are £2,672 and £2,384 respectively, about double the UK average.

UK housing crisis
A person from the Little Library stores some books at Hold in north London. Photograph: Graeme Robertson/The Guardian

On a visit to its first branch this week, the Guardian found Vincent, a professional drummer, practising in a soundproofed tiny unit because he cannot play in his flat. There was also a woman organising a charity library that had grown too large to store at home.

Hold’s approach appears to be to try to build on the decluttering movement pioneered by Marie Kondo, who argues that tidying up possessions can “reset your life”. It is also fitting hotdesk spaces, wifi and rentable music studios, as customers spend more time at the storage.

Renters at other complexes have previously told the Guardian they are using units as a workshop for a woodworking hobby, as a makeshift library, to run an eBay business, as well as for the standard stashing of surplus clothes and furniture. Some said they got a “punch” of satisfaction from seeing all their possessions in one place, while others said it enabled them to “live tiny” – in a van or even a car.

UK housing crisis
Average monthly rents for homes in north London, where the first Hold unit is located, are between £2,672 and £2,384. Photograph: Graeme Robertson/The Guardian

Despite the push to attract younger customers, most self-storage users are between 50 and 70 and often start because of a need to store inherited furniture and possessions after a family bereavement.

Philip Macauley, the head of self-storage at Cushman & Wakefield, said: “It’s still a middle-aged customer, but [operators] are trying to drive it to millennials. It’s the age-old London problem. Flats are getting smaller and with interest rate inflation you can’t afford a two-bed, you have to get a one-bed, and the flip side of that is [renting] self-storage.”

His report predicted “more lifestyle customers … long-term residential customers who genuinely use their self-storage unit as their room away from home, storing different items at different periods of their life”.

But self-storage is not the solution to the housing crisis, said Twomey. He called on the government to “build more homes, fund councils properly to crack down on landlords profiting from overcrowded rentals, and act to slam the brakes on soaring rents”.

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Landlords warned of huge rise in tenant fraud attempts

Landlords warned of huge rise in tenant fraud attempts
An analysis of over 600,000 tenancy applications has found that fraudulent applications rose by 140% last year.The analysis, carried out by PropTech supplier Goodlord, found that payslip fraud was the most common way tenants try to trick referencing systems.To carry out the analysis, a sample size of more than 300,000 tenancy applications from 2022 was compared with more than 300,000 applications from 2023.

The data shows that, in 2022, just over one case of fraud (1.2) was picked up for every 1,000 applications. In 2023, this rose to 2.9 cases in every 1,000 – a rise of 140% year on year.The most common form of fraud seen is payslip fraud – where tenants either boost the amount of income they’re receiving or edit its source, such as changing a company name. Methods used range from rudimentary editing through to the use of sophisticated photoshopping tools.Other forms of fraud picked up over the last year include providing false passport images, doctoring bank statements, offering fake references, and claiming to work for companies that don’t exist.

In 2023 alone, pay slip fraud accounted for 58% of all fraud cases detected and caught by Goodlord. Even one of these slipping through could cost the agent a lifetime landlord value of £10,000.

Despite the overwhelming majority of applications being above board, the rise in fraud over the last year highlights the need for robust safeguards against rental market manipulation.

Nimesh Parekh, Head of Referencing at Goodlord, comments: “Fraud can come in many forms. In some instances, tenants who are desperate to secure a property  think bumping up their salary will help seal the deal.

“Given the current pressures on the housing market, it’s understandable as to why we’re seeing a rise in this type of fraud. However, this is inadvisable as you could end up on the National Fraud Database, impacting future job prospects and other life events such as securing loans.

“And, of course, there is also a much darker side to fraud, such as criminals using false IDs to secure properties, or people who are looking to sign tenancies using forged documents.

“As the tools used to commit fraud grow more sophisticated and personal information is increasingly digitised, it’s vital that landlords and agents can access the cutting-edge technology designed to fight back – ones that can protect them and ensure they can let their properties out in good faith.“

Goodlord says referencing teams are being trained to spot the inconsistencies which give away fraudulent applications in the face of increasingly inventive tricks.

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Buy-to-let landlords are using limited companies to cut tax… but it could actually be costing them MORE

let landlords
  • Limited company landlords can offset mortgage costs against their tax bill 
  • This isn’t possible for those owning properties in their own name 
  • But a company structure brings higher rates and costs – so is it really cheaper? 

In recent years increasing numbers of buy-to-let investors have been buying properties via a limited company, rather than in their own personal name.

Last year alone, landlords set up a record 50,004 companies to hold buy-to-let properties, according to analysis by estate agents Hamptons.

There are a total of 615,077 buy-to-lets owned in company structures in the UK, an 82 per cent increase since the end of 2016.

One of the key reasons behind the surge in landlords buying via limited companies is that they can fully offset the interest they pay on mortgages against their tax bill. This tax perk is no longer afforded to people buying or owning buy-to-let property in their own name.

But there is a snag, in that mortgages for properties owned in a company structure are substantially more expensive. So what are landlords really saving?

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UK House Hunters Speed Up Plans to Beat Price Hike, Survey Says

UK House Hunters Speed Up Plans to Beat Price Hike, Survey Says
  • More London respondents keen to accelerate their home purchase
  • High mortgage rates caused demand for homes to weaken in 2024

Almost half of UK house hunters are set to accelerate their purchase plans this year, with many fearing that prices are about to climb again, according to a survey.

Some 42% of wannabe homebuyers are speeding up their plans compared with 35% in mid-2023, the Bloomberg Intelligence study showed. In London — where homes are the most affordable they’ve been in almost a decade — the share of prospective buyers bringing their purchases forward is even higher at 47%.

“Buyers’ expectation that property values will increase in 2024 could support UK house-price growth,” BI analyst Iwona Hovenko wrote in a report. “The fear of being priced out of the market if they delay has already prompted some to act.”

Read more: London’s Sky-High Home Prices Are Most Affordable in Decade

UK households endured a tough 2023 as high interest rates and a cost-of-living squeeze sapped demand for new homes. That caused property values to decline, though fears of a full-blown crash failed to materialize as optimism grew over interest-rate cuts.

The survey is based on answers from 1,000 adult respondents belonging to the 25-68 age group with a minimum annual gross household income of £45,000 ($57,630). Conducted Feb. 7-10, the survey has a 5% margin of error.