Will Leyland, 20 July 2017
The government has released the findings from its latest English Housing Survey, which it conducts annually.
The findings have rippled across the rental and private landlord sector and revealed some very interesting insights into a market which has come under attack from the government in recent years. Tax rises, new rules and legislation have been introduced to the detriment of buy-to-let landlords, with some leaving the market altogether.
People can’t afford to buy houses
The headline within the report states that owner-occupier rates have stayed stagnant for the third year in a row, meaning that people can’t afford to buy.
“The proportion of households in owner occupation increased steadily from the 1980s to 2003 when it reached its peak of 71%. Since then, owner occupation gradually declined to its current level. However, the rate of owner occupation has not changed since 2013-14.” This translates to the startling fact that homeowners have dropped 8% since 2003, meaning that a huge 8% of 22.8 million homes have turned from privately owned to rental properties.
New people aren’t becoming home owners
Those figures regarding home ownership are fairly damning within themselves, but scrutiny reveals exactly how bad that problem is. The composition of owner-occupiers has changed dramatically with many more now owning their property outright whilst those buying property with a mortgage has dropped significantly.
In 2015-16, 34% of households were outright owners while 29% were mortgagors. Since 2013-14 there have been more outright owners than mortgagors, and the proportion of mortgagors has declined (from 31% of households in 2013-14 to 29% in 2015-16).
This can be interpreted as a largescale issue with affordability and the ability of first time buyers to get on to the property ladder. This in turn, it should be said, will place larger pressure on the Private Rental Sector (PRS).
Private rented houses are still the majority
To further underline the necessity and importance of the PRS, it has been confirmed once again that private rentals far outstrip social rentals. In 2015-16, the private rented sector accounted for 4.5 million or 20% of households.
That’s a staggering number of families living in privately rented housing and puts into stark focus the measures the government have taken in an attempt to wring out more money from landlords whilst they provide such an essential service to the economy.
The majority of private rentals are families
Leading on from the stats about private rentals making the majority, it has been concluded that the majority of those privately renting are families and that number has and will continue to rise over time.
Between 2005-06 and 2015-16, the proportion of households in the private rented sector with children increased from 30% to 36%. Given the sizeable growth in the overall number of private renters over this period, this six percentage point increase equates to about 945,000 more households in the private rented sector with children.
This highlights the real importance of the PRS and the desperate need for government to recognise that private landlords provide essential housing to families and children. Much fantastic work has been done to promote reputable landlords and letting agents, leading to better quality housing, but in attacking PRS they are driving some away and, by proxy, taking away housing from families.
When asking private renters about their future housing prospects between 2014-15 and 2015-16, there was no change in the proportion of private renters who expected to buy a house.
The message from this report appears to be extremely clear; we need the PRS and landlords should be encouraged into the market. Whilst the prospects for home ownership remain so slim for the many, the government absolutely should be investigating what it can do to tempt more reputable landlords and letting agents into the market to provide essential housing for young people and families.
We can only hope that in the coming year a weakened government recognises this need.
For information on the rental opportunities available through Intus Lettings, please see here!
Will Leyland, 20 July 2017