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More people set to move into private rented accommodation

26 November 2010
Written by rosalind renshaw

In less than five years’ time, 17% of households will live in privately rented accommodation, it has been predicted.

The proportion would be up from 14% at present, according to Capital Economics.

The proportion of households in private rental accommodation has been growing steadily, after standing at 10% in 2001.

Ed Stansfield, chief property economist at Capital Economics, said: “Over the next three to five years, we think the most likely scenario is that the private rented sector will continue to expand. By 2015, it is plausible that 16% or even 17% of households will live in privately rented accommodation.”

He said the boom in tenancy demand was driven by students, immigrants and a rise in those squeezed out by property ownership.

He said it could be several years before house prices fall back to levels which makes home ownership a realistic option for many.

He also cited public spending cuts as increasing the number of tenants, as it would create more disadvantaged households whilst also reducing the provision of social housing.

Comments

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    mark said

    "as soon as funds are more readily available people will buy rather than rent."

    And where are those funds going to come from ? With interest rates at record lows there isn't much incentive for people
    to save at their bank / building society.

    In the past people paid of their mortgage by age
    50 then started saving. Even that only allowed 3 x salary mortgages, and those weren't being shared with the BTLers

    • 26 November 2010 17:26 PM
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    Debt is also shunting people from private ownership to rental, this is driven by the fact that people can no longer re-mortgage to pay the credit card bill so their only alternative is to sell up and pay the debt off with the equity and then pay more in rented than they were paying on their mortgage which will fuel another debt bubble and bankruptcy.

    • 26 November 2010 12:23 PM
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    Let's hope not! I have been in rented accommodation for 6 years and would love to buy - struggling to save the deposit and secure the mortgage and yet my rental payments are the same as a mortgage would be! The lenders should be taking this into account. I have 6 years perfect payment history and sufficient income for the mortgage I want and yet this is ignored by the lenders. I also can't take any of the FTB offers either because I had a mortgage, albeit some time ago, so I feel people in my situation are disadvantage from all angles! I could raise a 5% deposit far easier and I have the ability to pay the mortgage!

    • 26 November 2010 11:07 AM
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    When I started in this game in the 70's, private rented was a big part of the residential ballance of the country. Affluence and commercialism drove the property market to change towards private ownership. As we have less of this now I think it highly likely that private tenancies will become a larger part of of the property split. Most of my recent sales have been to private landlords , who already have large portfolios and are buying cheeply in a tough market. back in the 70's the company I worked for managed 50,000 private let houses for large "family monied" investors whose business was property. Whilst this might not be exactly how it changes, it will move towards thar position, as more potential buyers are kept out of the market due to their inability to raise the deposits of 10% or more of the purchase prices, until the prices drop to lower levels.

    • 26 November 2010 10:51 AM
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    Does this mean it's going to take 5 years for the mortgage market and housing markets to get back on track then?

    • 26 November 2010 10:45 AM
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    17% private rental households!!! I don't think so.With social/council accommodations at around 29% thats 46% non home owners in the country....almost half.This will never happen....as soon as funds are more readily available people will buy rather than rent.

    • 26 November 2010 10:14 AM
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