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* Home ownership seen overtaking renting within five years
* Low interest rates, rising rents encourage ownership
* Higher property prices and fear of inflation help too
By Tom Bill and Peter Dinkloh
LONDON/FRANKFURT, March 1 (Reuters) - After 20 yearsadvising other people on property deals, Berlin-based lawyerElke Springer did her own last year. Having rented all her life,she bought a house.
A growing number of Germans are doing the same in the wakeof the financial crisis.
Low mortgage rates, rising rents and fear of inflation meanthat on current trends more Germans will own their homes thanrent within five years, reversing a pattern seen since thecountry's mass rebuilding programme after the Second World War.
"The crisis years had quite an effect on me and I thoughtvery carefully about what to do with my money," said 54-year oldSpringer, who moved into a house in a wealthy Berlin south-westsuburb in January. "It was important the money was safe frominflation. In a bank you get less than inflation."
The value of property typically rises in step with the costof living, something Europe is battling to keep in check as itrecovers from the financial crisis. Inflation is a worry forolder Germans in particular, brought up with stories of howswathes of the population twice lost their savings during boutsof hyperinflation in the first half of the twentieth century.
Homes owned by their occupier accounted for 46 percent ofall German dwellings in 2011, according to official data, upfrom 43 percent in 2010, though that is still the second-lowestproportion in Europe after 39 percent in Switzerland.
Tenant-friendly laws and a larger number of well-appointedhomes for rent mean renting doesn't have the same stigma as inother countries. Home ownership is 58 percent in France and 69percent in Britain, according to research group Euroconstruct.
However, a surge in German mortgages last year suggests thegap may narrow. Schwäbisch Hall, one of Germany's biggestbuilding societies, issued almost 33 billion euros ($43 billion)of mortgages last year, up from 25.2 billion in 2009 and thehighest amount it has ever lent, the company said in January.
Ultra-low interest rates are encouraging Germans to becomehomeowners, said Matthias Pink, head of research for propertyconsultant Savills in Germany.
"Five years ago buying property was not really a topic ofconversation," Pink said. "Today you can get mortgages at threeor four percent, which is significantly lower than five or tenyears ago when they were above six percent."
A typical 75 square metre flat in Frankfurt cost 640 euros($840) per month to rent and 710 euros to buy 10 years ago basedon a 30 percent deposit, Pink said. Today, thanks to lowerrates, it would cost 795 euros to rent and 540 euros to buy,despite the purchase price rising to 215,000 euros from 180,000.
Upmarket estate agent Knight Frank opened a residentialbusiness in Frankfurt in 2012 to exploit what European managingdirector Chris Bell calls "an inflection point in the market".
"Germany is out of kilter with most of developed Europe andit's purely based on cultural logic, not financial logic," hesaid.
TAKING THE PLUNGE
The popularity of renting has kept German residential pricesbelow those in Britain, but the gap is narrowing.
The price of a typical new-build home in Frankfurt rose 13percent to 3,500 euros ($4,600) per square metre in the year toJune 2012, while it rose 3 percent to 5,900 pounds ($9,000) inGreater London in the year to December, according to propertyconsultant Jones Lang LaSalle.
Martin Loll, a Frankfurt-based lawyer at Clifford Chance,and his girlfriend planned to amass a larger deposit beforebuying but changed their minds during their first visit to aprospective new home last September.
"When I stepped onto the balcony and saw the Frankfurtskyline I was overwhelmed," Loll said. "I was losing and winningseveral thousand euros each day with my savings during thecrisis and I couldn't stand it any longer."
They paid 490,000 euros for a fourth floor flat in southernFrankfurt at a mortgage rate of 2.61 percent after putting downa 100,000 euros deposit.
"The insecure situation in Europe helps convince even peoplelike me who originally did not want to take on debt and wantedto remain flexible," said another German buyer who hadpreviously invested in German bonds.
Rising levels of home ownership will concern investors inthe popular German rental sector, though any switch seemsunlikely to have an impact in the short term.
Transactions involving parcels of 10 or more Germanresidential properties rose 70 percent to a five-year high ofabout 11.1 billion euros in 2012, as investors were drawn to abet on the strength of the German economy, according to datafrom Jones Lang LaSalle.
In January residential property company LEG Immobilien listed on the German Stock Exchange and there is talkof more to follow including Deutsche Annington in a market whereyields are about 4.5 percent for the best housing and 6 percentin secondary locations.
While rents have been low in the past, that has put manycredit-starved developers off building. Together with a growingpopulation in major cities, that means demand has exceededsupply, pushing rents up and providing another reason to buy.
Rent rises of 19 percent in Berlin and 14 percent inFrankfurt over the last three years have put the issuecentre-stage in the campaign for September's general election.
The Social Democrat opposition candidate Peer Steinbrück haspromised to cap rent increases at 15 percent over four yearsfrom 20 percent and build more social housing.
Demand has pushed property prices up more than 10 percentper year in the major cities and though not everyone can afforda deposit, many Germans are talking about how they can benefitfrom such rises, Bell said.
"You heard similar conversations on the streets in Spain in'96 and '97 and Poland in '03 and '04," he said, referring toother ownership booms. "There is a generation now asking 'why amI throwing money at a landlord?'"
