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It’s an indication of how much the asset value of property dominates our thinking, that this week’s property news has so far been pre-occupied by a survey of “England’s richest streets” rather than far more important rental market data.
For those who missed it - and sadly that will be most who rely on the mainstream media - the government’s annual English Housing Survey (looking just at, er, England) produced startling figures at how quickly the residential landscape is changing:
- the private rented sector has risen from 2.4m households in 2005-6 to 3.4m in 2009-10;
- therefore 15.6% of English households are in the PRS, up from 11.7% five years ago;
- the proportion of homes in owner occupation is down from 70.9% to 67.4% in that time.
Is it just me who finds these figures surprising?
Of course the PRS is booming because it's the last resort of those frustrated by poor mortgage availability. But I thought that surge would be tempered at by a fall in corporate renting, as was feared before the recession. The English Housing Survey shows how wrong I was.
If anyone thinks this is a passing phenomenon, to be reversed when the sales market recovers, look at these EHS figures:
- half of all private renters are under 35 with half a million (15%) between 16 and 24, and 1.2 million (35%) aged 25 to 34;
- 60% of PRS households are in full-time employment, 9% part-time, 7% unemployed, 8% retired, 11% ‘other inactive’.
These figures show, surely, that the PRS is now a way of life for many younger people in particular.
With restricted mortgage availability for most young would-be buyers entering its fourth year, and few lenders breaking cover with high LTV products, renting is set to stay a big part of our landscape. Many forecasters predict the PRS will hit 20% soon.
The EHS data also shows 40.8% of PRS homes as “non-decent” and chronicles how the sector remains less regulated than sales, from membership of the Property Ombudsman Scheme to financial management.
In the light of that final data, it is perhaps not just negligent newspapers which ought to take the private rented sector more seriously.
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