Why Germans rent

Why Germans rent and Brits buy (skynews)

So how different are the two nations when it comes to finance? The differences between property buying in the UK and Germany couldn’t be bigger.

In Britain, there’s 70% ownership while in Germany it’s 30%.This has led to a property driven economy in the UK but has also sparked the problem of credit and mortgage payments.

Gordon Brown said last year that we have reached a golden age – but it has led to recklessness. You don’t find this in Germany. Germans are a more careful, anxious people, some might say prudent.


Germans save a lot – 11% of their income which is the second highest in the world after Japan. In the UK, it’s only 1.1%.


In Germany, people save for a rainy day and most rent in flats and don’t have this ‘front door letter box’ syndrome that you have in Britain.

When it comes to mortgages, German’s have never been able to borrow 90% of the house value and barely get 80%. They have to put down a quarter of the purchase price as a deposit.

Banks would never give you the size of mortgages (up to 120%) you got in Britain. They check you are financially stable.

Germans are quite happy to pay rent. The property market has been depressed for a decade. Buying is not seen as an investment. You buy it, live in it and then it stays in your family and continues in the family.

There is so much spare space. Places are empty because Germany overbuilt after the Berlin Wall came down. They have not been looking at Britons with envy. They looked at them as foolhardy.

They were able to see through Britain’s bubble and wondered at a society that could be so reckless. Debt amounts piled up by many British families over the last 10 years would create nightmares for most Germans. As a rule they are far more risk-averse, across the board, than their British counterparts.

Also in Germany, some of the rental market is controlled by the Government. Landlords are not free to charge what rent they want. The Government is seeking to protect tenants against landlords.


There is a culture of carefulness – maybe even suspicion. At any rate, credit cards have almost gone out of fashion in Germany.

Debit cards are more accepted there. Germans are happier to keep control of their expenses and don’t want it piling up at the end.

Shops prefer debit cards because they are afraid of credit card fraud.

Also, many shops will not accept credit cards because they want their money at once.


The UK Government says that Peer Steinbruck’s comments about Gordon Brown’s rescue plan is just the German Coalition Government’s view and they will eventually come round to Mr Brown’s way of thinking. This is not true.

Steinbruck’s view is the same as Chancellor Angela Merkel. There is no need to rush to act. There has already been a stimulus package of a couple of billion euros.

What is looming in Germany is a labour market crisis.

Some 47% of Germany’s national income is from exports but they are being hit by the global downturn. Germany has a lot of successful medium-sized businesses but the big exporting ones are not doing as well at the moment.

Witness the dramatic world-wide downturn in demand. If this leads to a dramatic rise in unemployment – especially in the motor industry – then Chancellor Merkel will have to look at either cutting taxes or boosting public spending (like what Obama plans).

Thomas Kielinger is a German journalist with Die Welt. He is based in London.

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