Private rented sector continuing its growth – but don’t expect all tenants to be happy

The latest English Housing Survey, published yesterday, shows the private rented sector continuing to grow.

In 2015/16 there were 4.5m households renting privately in England, representing 20% of all households.

This means the proportion has doubled since the eighties and nineties, and there are now 2.5m more households in the sector than there were in 2000.

Strikingly, almost half of 25 to 34-year-olds (46%) now live in the private rented sector, up from a proportion of 24% in 2000.

There has also been an increase in the number of families, particularly lone parent families, living in the sector. The proportion of families with dependent children living in private rented accommodation was 30% in 2005/6 and last year stood at 36%.

However, not everyone is happy to be a private tenant, suggesting that some still see it as a stigma.

In 2015/16, 21% of private tenants were dissatisfied with their status, of whom 9% were very dissatisfied. That compares with dissatisfaction of less than 1% of owner-occupiers.

The survey also reports high churn in the private rented sector – far higher than in other sectors.

In 2015-16, 787,000 households moved within the private rented sector (i.e. from one privately rented home to another) and 196,000 new households were created.

There were 187,000 moves into the sector, of which 72% (135,000) were from owner-occupation.

There were 256,000 moves out of the sector, with 67% (172,000) of these moving to owner-occupied accommodation and 84,000 moving into the social rented sector.

One in ten tenants who had moved in the last three years said they had done so because their landlord had asked them.

The English Housing Survey also has a section on first-time buyers. It says numbers have not changed in the last ten years, but are down on 20 years ago.

In 2015/16, there were 654,000 first-time buyers in England, equating to 3% of all households in England and to 5% of all owner-occupier households.

The average age of first-time buyers was 32 last year, with 21% of them aged between 35 and 44.

Two thirds (66%) of first-time buyers had previously lived in private rented accommodation.

Of current private renters, 59% expect to buy at some point in the future.

However, 70% of all renters said that affordability was the main barrier to home ownership.

Looking further at affordability, the survey found the average private rent was £300 a week in London, almost twice the average of £153 outside London.

In London, it was cheaper to have a mortgage than to rent; outside London, average rents were the same as weekly mortgage repayments.

On average, those buying their homes with a mortgage spent 18% of household income on mortgage payments; for social renters, the proportion was 28%; and for private tenants, the proportion of income spent on housing was 35%.

Among owner-occupiers, more now own their home outright, rather than with a mortgage. The number of households with a mortgage is down from 8.1m ten years ago to 6.6m, the lowest on record. It means only 29% of owner-occupier households have a mortgage, compared with 39% in 2005/6.

There is a lot to read and digest, and more pie charts than you could shake a stick at, but the English Housing Survey really is the business – indeed, it is an important document for agents planning their businesses.

https://www.gov.uk/government/collections/english-housing-survey

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