Why Germans Love Renting Their Homes

michaels

CLAPTON wrote: »

you forgot to mention that Germans have a higher level of state pension that the UK
... you know the sort of pension that's 'unaffordable' in the UK but appears OK in the paradise that is Germany.

Is it supported long term especially given their demographics? Do they pay more tax to fund it?

boatman

For Germany the pension probably is sustainable because throughout the system there is a greater feeling of fair play, of what is right, I'm sure they will have raise their retirement age though.
I'm not sure Germany is a 'paradise' but they certainly have a higher standard for the lower paid and there is not the greed at the top end, i think everyone is closer to the mean.

CLAPTON

boatman wrote: »

For Germany the pension probably is sustainable because throughout the system there is a greater feeling of fair play, of what is right, I'm sure they will have raise their retirement age though.
I'm not sure Germany is a 'paradise' but they certainly have a higher standard for the lower paid and there is not the greed at the top end, i think everyone is closer to the mean.

do you have any evidence for this?
do you know anything about the german pension model?


why are pensions more affordable because there is a greater feeling of fair play : does that produce more money?


is overall tax lower or higher there than here : is that relevant to being able to afford state pensions?

movilogo

Couple of months back there was a BBC Panorama show on TV regarding German culture.

There are loads of dissimilarities between them and us.

Women there raise kids at home. They don't commute half the country every day to earn few quids more. They still have some good manufacturing (compare with our financial service based economy).

Although, I didn't agree with their rental philosophy. When you rent a house in UK, you get a fitted kitchen (even in unfurnished house). But in Germany, you just get a room designated as kitchen and then you fit all your cabinets at your expense and then you take them away (even though they won't fit elsewhere) when you vacate the house! Crazy ideas!

On other hand, their tenants get lot more protection. They can't be kicked out with 2 months notice.

CLAPTON

michaels wrote: »

Is it supported long term especially given their demographics? Do they pay more tax to fund it?

the European model of pensions (Bismarkian) tend to have higher state provision and lower private provision


other than that, I've little idea, just as I have about their housing : however general economic principles, simple maths etc say that to provide the same benefit, then the costs must broadly be the same : their distribution may be very different however.


but I sure you are right in implying that the demographics will create a problem for them just as they will for any country with similar demographic profiles

Tancred

Joe_Bloggs wrote: »

The key thing is that German residents are happy to be tenants.There may be contrasts to be made with UK tenants trying to save for a deposit whilst paying increasing rents.

@Hamish do you have any data from this decade ?

They are happy because tenants have lots of rights and long protected leases.

Tancred

movilogo wrote: »

Although, I didn't agree with their rental philosophy. When you rent a house in UK, you get a fitted kitchen (even in unfurnished house). But in Germany, you just get a room designated as kitchen and then you fit all your cabinets at your expense and then you take them away (even though they won't fit elsewhere) when you vacate the house! Crazy ideas!

Not crazy at all. When you rent there it's basically a permanent arrangement - effectively 'for life'. Moving is rare. They have strong 'anti-chav' laws to stop anti-social behaviour and the police will enforce these laws assiduously. In the UK the coppers just do jack sh*t about anti-social behaviour.

Tancred

michaels wrote: »

Is it supported long term especially given their demographics? Do they pay more tax to fund it?

They do pay more, of course they do! Same as in other countries in Europe. I have many friends in Italy and they pay 29% NI in return for a pension that pays 86% of final net salary after 40 years.

I would go for that system any day of the week in place of our broken UK pensions system.

mayonnaise

Okay, so Germany has more renters than we do, due to historical and financial reasons and renter friendly legislation.

BUT, despite all this, in Generali's link, we see a slow but steady increase in German home ownership.

Fact is, nothing beats owning your own little piece of Earth, rather than paying someone else to temporarily use theirs.

It's human nature.

michaels

Tancred wrote: »

They do pay more, of course they do! Same as in other countries in Europe. I have many friends in Italy and they pay 29% NI in return for a pension that pays 86% of final net salary after 40 years.

I would go for that system any day of the week in place of our broken UK pensions system.

So either the maths works in which case there is nothing stopping you from making the same level of contributions here for the same benefit on retirement, or actually they are not paying enough given life expectancy etc and the reason it looks a good deeal is because it is a ponzi scheme.