While housing affordability is a serious and growing problem across Europe, the decision to rent is influenced by a combination of affordability issues, historical trends, cultural norms, and tenant protections.
This decision, however, varies significantly between countries.
Western European countries with higher renting rates
Some Western European countries have much higher renting rates than the EU average, pushed down by former socialist Eastern Europeans. In Western countries, renting is a common and culturally accepted form of housing, not just a result of financial constraint.
Country
Homeownership Rate (2023/2024)
Switzerland 42.6%
Germany 47.6%. The majority of citizens in the biggest EU economy are renting.
Austria 54.3%
Denmark 60.0%. Only 5 mln. people live in Denmark.
Key factors influencing renting in Western Europe
In countries with higher rental rates, a blend of economic and cultural factors is at play:
A strong tradition of renting: In Germany, for example, a culture of renting has existed since the post-World War II period. At the time, rebuilding efforts focused on building rental housing, and Germans became comfortable with renting for life.
Better tenant protections: Countries like Germany have robust regulations that favor tenants. This includes strict rules on rent increases and difficulty with evictions, which makes long-term renting a secure option.
Aversion to debt: Some cultures, particularly Germany, have a strong aversion to taking on large, long-term debt like a mortgage.
High property costs: In many Western European cities, particularly major urban centers, real estate prices are exceptionally high. This can make saving for a down payment difficult, even for high earners. Banks in many European countries also have strict lending rules, requiring large down payments.
A functioning rental market: Countries with lower homeownership often have a large and well-regulated rental market, with higher-quality rental units available. This makes renting a genuinely appealing long-term option, not just a temporary one.
Greater mobility: Renting offers flexibility, which is attractive to younger people or those who need to move for work. With a large rental stock, it is easier to relocate than it is for homeowners.
A growing affordability crisis
While the premise that most Western Europeans cannot afford to buy is an oversimplification, it is true that a housing affordability crisis is affecting many parts of Europe.
House prices have risen significantly in many EU countries, with average prices rising nearly 50% between 2015 and 2023.
The most vulnerable are young people, low-income households, and city dwellers who are disproportionately affected by rising rents and have fewer affordable options.
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