Secondary property ownership in Europe: contributing to asset-based welfare strategies and the ‘really big trade-off’

Abstract

This paper examines the role of secondary property ownership (SPO) in Europe (EU). Focusing predominantly on residential properties used as rentalinvestments, it explores their role in the political economy of housing and welfare, contributing to respectively newer and older literatures about housing wealth and asset-based welfare and the 'really big trade-off' between outright homeownership and generous pensions. Both have hitherto largely been viewed as related to ownership of the primary residence. The empirical part of this paper is based on the Household Finance and Consumption Survey (HFCS), carried out by the European Central Bank in 2014, and providing information about property ownership by samples of households in 20 member states of the EU. The results show that the total wealth held in the form of SPO is considerable while also varying considerably from country to country. SPO held as an investment in the form of landlordism is most prevalent in countries characterised as corporatist-conservative or liberal welfare regimes. In the corporatist-conservative countries, SPO can be seen as a since long established proactive asset-based welfare strategy that compensates for the limitations of their fragmented pension systems, especially for the self-employed. In liberal welfare states, the recent upswing of buy-to-let landlordism is a manifestation of the concentration of housing wealth and limited access to homeownership for starters, which makes SPO an ever more attractive investment.

Resurgent landlordism in a student city: urban dynamics of private rental growth

“…This point is underscored by the fact that larger-scale landlords are relatively often non-local actors. Furthermore, the concentration of property in the hands of a smaller group of affluent individuals contributes to increasing wealth inequality in contemporary societies (Arundel, 2017;Wind et al, 2020). This has implications for policy turns toward asset-based welfare in which housing equity is increasingly central to household economic security, particularly in older age.…”

“…Recently, private investments in rental housing have intensified across Western countries. Landlordism is on the rise as market-liberal housing policies have allowed property owners to enjoy both higher rental yields and house price gains in countries including the United Kingdom, the United States and the Netherlands (Wind et al, 2020). Privaterental growth comes after decades of continuous decline and disinvestment and is driven by a highly diverse set of players, ranging from large institutions such as pension funds, corporations and investment trusts managing entire real-estate portfolios (Beswick et al, 2016;Fields, 2018;Wijburg et al, 2018) to private individuals owning a small number of properties as an insurance, future pension provision or speculative propertyalso known as buy-to-let (Aalbers et al, 2020;Ronald & Kadi, 2018).…”

What's wrong with investment apartments? On the construction of a ‘financialized’ rental investment product in Vienna

“…Different to the UK for example (Kemp 2020), in Austria there are neither national representative surveys of private landlords, nor have national statistical authorities so far addressed the question of 'secondary' or 'multiple property ownership' and income from renting in their household surveys. Data from large, statistically representative household surveys at the EU level (such as the CEB's Household Finance and Consumption Survey carried out in 2014 and 2015 in 20 EU countries) are useful for a country comparison with regard to the assessment of secondary property ownership (SPO) in the political economy of housing and welfare (Wind, Dewilde & Doling, 2020), but are less suitable for assessing the development of local housing markets. The market studies mentioned at the introduction also have their weaknesses.…”

Safe havens: overseas housing speculation and opportunity zones

“…These were entry-level, buy-to-let investors "driven by a desire for reasonable gains in revenue and capital appreciation" (Atkinson, 2019, p. 3). Some were willing to invest outside of well-known city centers or live frugally in their home country in order to secure stable future returns outside of riskier domestic markets, often in lieu of pensions (Ho & Atkinson, 2018;Wind et al, 2020). Others looked to root their family's future overseas by sending children abroad for education, investing through golden visa schemes, or getting themselves or their children a less expensive foothold into the next level of asset-ownership class (Liu & Gurran, 2017;Wong, 2017;Arundel & Hochstenbach, 2020;Ho, 2020).…”