Private renting is increasing, including among families, while home ownership remains stagnant
The English Housing Survey, published last week, reveals a housing system that continues to move towards private renting with levels of home ownership stagnant.
Despite years of subsidies, such as Help to Buy, the ‘reinvigoration’ of the Right to Buy and its extension to housing association tenants, home ownership remains stubbornly on 64 per cent of all households in England, down from the 2003 peak.
First time buyers are also older on average – 33 years old compared with 31 a decade ago – illustrating the difficulties of getting on the housing ladder for young people as home ownership remains unaffordable for the majority.
Private renting has now grown into the second largest tenure with 4.3m households renting privately compared with a shrinking social sector of 3.9m households. Even though private renting had been in long-term decline from the end of the First World War, it has been boosted over the last fifteen years by the influx of buy-to-let landlords who compete for available new homes for sale with potential first-time buyers.
Younger people are now more likely to be renting privately than buying a home. Over the last ten years, the proportion of young people renting privately has increased from 24 per cent to 46 per cent.
Worryingly, there has been an increase in the number of families with dependent children living in an often insecure private rented sector. In 2004/05, this was 30 per cent but climbed to 37 per cent in 2014/15. This equates to almost a million families with dependent children relying on private renting – many of whom have to move every two or three years, causing damaging upheaval to family life and to children’s well being and education attainment.
The proportion of private renters who expect to buy has declined from 61 per cent to 57 per cent over the last two years, indicating growing disillusionment with the idea that home ownership is increasingly attainable. Simultaneously, the costs of private renting are ballooning; especially in London where the average rent has increased from £281 per week to £298 since 2013/14. Private rents today are almost double what they were at the turn of the century.
Unsurprisingly then, the number of working private renters in receipt of housing benefit has climbed from 14 per cent in 2013/14 to 18 per cent in 2014/15, stemming from the conflation of rapidly rising rents and stagnant wages.
Under-occupation in both the social and private rented sectors has declined – partly due to the unaffordability of spare rooms becoming and pressures from the Bedroom Tax. The real under-occupation problem is in the home ownership sector where 51 per cent of homes are under-occupied today in contrast to 39 per cent twenty years ago.
Some form of imaginative intervention – perhaps offering subsidies for home owners to downsize – by a government committed to better use of the housing stock would free up larger homes, which are most needed by growing families. Unfortunately, such an imaginative government is not currently in power.
Our government would rather pressure desperate people in social housing to move to smaller homes or lose housing benefits, even though under-occupation in social housing is not a significant problem.
The English Housing Survey underscores a dysfunctional housing system, run for the benefit of the few lucky enough to own their homes and the growing private landlord class.
The real solution to England’s housing crisis is to build more social homes at lower rents and with greater security, so providing an affordable and cost-effective housing alternative to lining the pockets of private landlords with rent subsidies and throwing scarce resources at short-term home ownership initiatives.
Kevin Gulliver is Director of Birmingham-based research charity the Human City Institute, former Chair of the Centre for Community Research, and part of the SHOUT save social housing campaign. He writes in a personal capacity.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.