Home Ownership is rising, but Private Renting needs work

The recently released English Housing Survey statistics show a welcome increase in home ownership from 2017 into 2018. It is also reported that private rentals are increasing but lagging behind in the quality and standards available.

There has been a 5% increase in home ownership in the 35-44 year old age group, in comparison to the previous year. However when compared with the numbers of people in this age group 10 years ago, before the housing crash, the numbers are still low. The proportions of people in this age range in the private rental sector have grown from 13% 10 years ago, to 28%. People under 45 years old make up around two-thirds of private rental tenants.

There has been a lot of work in recent years to stimulate the population into home ownership, with lots of government schemes encouraging this path. The average age of a first-time buyer is 33.

In the 25-34 age bracket, private renting makes up 44%, up from 28% 10 years ago, and home ownership decreasing from 55% to 38% now. It isn’t until you reach the 35-44 age group that home owner-occupier figures are greater than the private rental sector.

Age and Economic Status

Overall owner-occupier is still the largest percentage of people with 64% falling into this category, although this is not as high as the 2000s, and is not too different from the rates seen in the 1980s.

Among the owner-occupier group, there are more people who own their home outright, than have a mortgage. This would suggest that this group is dominated by people who bought their properties outright many years ago. Of the people who own their homes outright, 64% of these people are over 65. This isn’t surprising that those who have owned their homes the longest are the ones who have paid off their mortgages.

However, the over 65 age group are the most prevalent in the social rental sector. This shows that housing the elderly generation is also an area in need of attention. The focus should not all be on the first-time buyers, and the older generations do also need housing help.

The economic status of the private rental sector shows us that it is the young professionals and families who are being priced out of the homeownership market. About three quarters of those people in private rentals work full time.

The need for two household incomes to be able to buy a house was a key point shown. 47% of first-time buyers were couples without children. Individuals buying alone was down from 26% to just 16%. As an average owner-occupiers who have a mortgage spent 17% of their income of their repayments, whereas people renting spent 33% of their income on rent payments.

Private Rentals

The Private Rental Sector houses around 4.5 million people, which is about 19% of homes in England. Private renting is more popular in London at 29% with the rest of the country at 18%.

Rent prices vary hugely across the country in comparison to London, the difference between private and social renting also significantly differs. Private rent in London is on average £312 per week, and almost half, at £158 outside of the capital. Social rent as an average is £133 in London, and £96 elsewhere. The question of affordability is raised when you compare this with the percentages of income spent on rent.

When you look at the quality and standards of the home within the private rental sector 25% of them failed to meet the ‘Decent Homes Standard’ with 14% of them falling within the ‘Category 1 Hazard’ range. Although the proportion of homes falling in this range has fallen, it was 31% in 2008, the level of rental improvements has stalled in recent years.

Homes in the private rental sector were more likely to be older buildings with 35% being built before 1919. They were also the least likely properties to have central heating or a working smoke alarm.

More work needs to be done to improve the tenants positions, protect and educate them on their rights in the private rental sector. This should come via Government regulation through the landlords and agents to help improve the entire rental stock.

Are you a First-time buyer, read our blog for more information on Building Surveys and Home Buyer Reports.

Contact Richard for any advice needed when buying a property to rent or reside in.