A Cambridge University study has shown that there are millions of young families who are living in an era where renting is the norm. It also shows that there are a growing number of parents who are unable to buy their own property. Price increases are blocking home ownership and this trend is expected to last until at least 2022.
This is good news for property owners who have houses that they protect with buy-to-let property insurance. The future also looks bright for landlords because if the British economy remains stagnant, it means that only 27% will be in a “mortgaged home” by 2022, compared with 43% in 1994 and 35% this year. The research also found that it is not just young people who are being locked out of the property market and forced into the rental sector due to rising house prices, falling wages and banks who are just not willing to lend. The same difficulties are now affecting older people, many of whom are paying half or more of their income in rent and, as a result, have little left each month to save for a deposit to buy their own property.
Shelter’s Chief Executive, Campbell Robb, said “This report shows what is fast becoming the new reality of our housing market in the current economic climate: home ownership continuing to fall while renting becomes a way of life for British families. Yet despite the growing pressure on the rental market, the government’s recent housing strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face. It’s time government woke up to the fact that ‘rental Britain’ is here to stay.”
The study shows that the coalition must acknowledge renting is fast becoming a way of life for the majority of the UK. Many experts want them to do far more to encourage investment in the private sector and to protect the rights of those who are unable to buy. Many in the industry also believe the United Kingdom should move to a regime more like Germany, where the tenant has extensive rights including security of tenure and assured rental rates.