UK housing market – Home ownership has fallen for the first time in almost a century according to the Office of National Statistics, who has recently published a report based on information gathered during the 2011 Census.
In 1918, three-quarters of Britons rented. Home ownership was the preserve of the wealthy few. After the Second World War, the percentage of people owning their homes started to steadily increase. Rising wages meant that home ownership started to become something that many more could aspire to. By 1971, 50% owned their own homes. The huge council house building program that took place between the 1950s and 1970s meant that by 1981, nearly a third of Britons were in social housing. The private rented sector was shrinking.
Changes
The 1980s Right to Buy scheme helped increase home ownership even further, but it also put many more homes onto the private market. In 1989 rent controls that had been in place for most of the century were ended. It was becoming more and more attractive to be a private landlord, and the buy-to-let boom began. From the 1990s onwards, many ordinary people have been able to become private landlords. But the private rented sector has tended to be a second-choice option for most. People would rent for a few years in their twenties, before settling down and buying a long-term home. The ONS figures show that between 2001 and 2011, the percentage of people renting grew from 31% to 36%. And the percentage people owning fell from 69% to 64%. This is the first fall in home ownership since 1918. At the same time, the percentage of people in social housing has fallen to 18%, and the private rented sector has stepped in to fill the gap.
Will the private rented sector keep growing?
The government is working to help would-be buyers with its Funding for Lending scheme. Lenders are beginning to make it easier for buyers to get mortgages. This has meant that housing sales have increased in the last few months. Despite this, experts predict that the private rented sector will keep on growing. Savils estimate that around 1 in 5 homes will be privately rented by 2015.
Happy renting?
The private rented sector has a poor image. With more people renting, perhaps landlords need to work to foster good relationships with their tenants. Tenants who see their landlords as hard-working professionals are more likely to respect their homes and their landlords. Think about what you can do to help your tenants gain trust in you as a professional, even when they may be reluctant tenants. Make sure you comply with relevant legislation. Keep up to date with basics such as landlords insurance. Carry out repairs promptly. Better landlords tend to have better tenants. They also help the image of the private rented sector.