Rent All The Things

What Happens To Cities Like London When The Majority Own Nothing And Have To Rent Everything

If you live in London there’s a slightly greater than 50/50 chance that you’re a renter. If you’re under 35, your odds rise considerably. However, this isn't another article about the high cost of renting a place to live in London.

Instead, this article will focus on the far greater changes occurring to those of us who live in the world’s biggest and most expensive cities. A lifetime of renting rather than ever owning a place to live might be the media’s current cause du jour, but it is only one facet of much more dramatic change.

Already in London you can rent just about everything. Obviously you can rent a flat (apartment for American readers) and unlike standard North American rental arrangements a large number of flats come fully furnished (so you don’t need to buy additional furniture).

If you live (or more likely work) in central London you hire a Boris Bike and return it to one of the hundreds of docking stations scattered across zones 1-2. You can of course rent a car either from standard car rental companies or car sharing companies such as zipcar.

Businesses are no exception to this trend. They of course have almost always rented their office space, but increasingly they can operate from shared work spaces such as London’s Google Campus. In the past companies would own their own equipment but these days they can rent everything from computers to franking machines.

Once upon a time companies would give you the option of selling your time to them in return for a guaranteed job. Those days are long gone. Increasingly people are either hired for specific tasks like building a website or on short terms freelance contracts.

Even the things that many people use to define themselves can be rented these days. You can of course rent a mobile phone, festival gear and the even the clothes on your back. However, friends can now be rented by the hour, commodifying the most basic of social interactions.

In short, in big cities, it’s now possible to live your life without ever owning anything. So just what are the impacts of this shift from ownership to renting? Well there are both positives and negatives which will reshape the way we live.

Positives

In a sense this change is somewhat of a return to a historic norm. In 1918, 77% of households in the England and Wales rented rather than owned their own homes. With less than half the people in London now owning their own places, it looks as though we’re coming full circle.

Many rental arrangements are a more efficient use of resources than previous ownership models. In many ways a rental society can catalyst towards minimalism.

For example, transportation hire schemes mean you don’t have to deal with issues such as insurance, repairs and storage. This simplifies your life while also saving you money.

A rental society is also a more flexible society. Moving rental flats is a whole lot easier than selling and buying one. As the world becomes more global this makes moving from city to city and country to country much easier.

Similarly, being a freelancer means you can choose to work when you want to work (within reason of course). It also means you can pick and choose who you work for to some degree. If you want to take a sudden trip to Tokyo you can without asking a boss.

So in short a rental society is one that can be more minimalist and more flexible. However, these benefits do have some pretty serious costs.

Negatives

The main negative with this change is that those who do own things are reaping increased profits. Don’t believe me? Asking for prices in London have risen by 10% in the last year, which means the typical homeowner saw asset value increase by £50,000 in a year.

For many, the increase in the value of their property is larger than their salary. And those who own properties to let are also able to command ever increasing rents.

Similarly companies are able to enjoy larger profits without having to pay all the associated costs of employing someone full or even part-time. While many people enjoy the freelance lifestyle, it can have consequences.

For example, try to get a loan without regular employment and you may be turned down or if you do get approved have to pay a higher interest rate due to increased risks. This makes it ever more difficult to move from a renter to an owner if you want to.

Thus the change from owning to renting most of our things is already transforming the way we live. While it can be useful for leading simpler and even greener life, it does come with very real costs. Those who own things, flats, businesses, etc. will be able to earn ever more money. Yet, this may just be the price that has to be paid for flexibility.