A report by Castle Trust, a housing and shared equity mortgage provider, shows that approximately 4.5 million tenants (61% of all private and social renters) have low expectations of ever becoming home owners.
Data from the latest Office of National Statistics English Housing Survey was analysed, revealing that 3 million social renters and 1.5 million private renters do not believe that they will ever own their own home. Of those that do believe buying their own home is a realistic possibility, around 1.5 million, most do not expect to start looking to buy for five years or more.
Owner occupation in England has fallen by 200,000 from 14.6m in 2008 to 14.4m in 2012. During the same period, the number of private renters increased by 23% from 3.1m in 2008 to 3.8m in 2012.
Sean Oldfield, chief executive officer at Castle Trust, said, “Many people are either unable to get on the property ladder or stuck in their current home despite interest rates still being at an all time low. Schemes like the government’s Funding for Lending are helping to boost borrowing options but the market still needs innovative lending products.”
What may come as more pleasing news for private renters is that rents fell on a national level for the fourth consecutive month, although, not by very much. Rents across England and Wales dropped by 0.1% in February. However, rents are still 3.3% higher than February 2012.
The average rent in England and Wales now stands at £731 per month, according to LSL Property Services.
This national average, however, can be a tad misleading. Half of all regions actually grew on a monthly basis. The region that saw the most growth was Wales, with a 1.8% rental inflation, followed by the North-East, with rents now 0.9% higher than in January. Rents in London also returned to growth after a brief dip, increasing by 0.5%.
Rents in the North-West fell by 1.3%, the fastest faller in February. There was a 1.1% drop in the East of England and a 0.7% fall in the South-West.
On an annual basis, only the South-West has seen a drop from the previous year (1.2%). Unsurprisingly, London grew the fastest by far in the last year, rising 6.2%. The South-East is up 3.3% and rents in Wales are 2.9% higher than last year.
David Brown, commercial director of LSL, said, “The rental market hasn’t yet burst into life, but we’re seeing more vitality than last year’s timid February market when tenant demand was impacted by the rush to buy homes before the Stamp Duty deadline.”
“The supply of rental homes will have to increase considerably to prevent monthly rent rises when the rental market re-enters its traditional peak season.”
Arrears have fallen to £248m in February, down from £269m in January. This equates to 7.4% of all rent across England and Wales, down from 8.1% of all rent the previous month.
Back to news