Housing experts in the United Kingdom (UK) are forced to admit that many prospective first-time homebuyers will never own a home and will rent forever, despite the relative success of new government programs to assist those buyers into the market. This has led some experts to refer to these younger renters as “Generation Rent” and it is not a designation that does not sit well with many analysts, policymakers and young people would like to one day own their own homes. The data that the support these findings is now being used to once again take up the cause of more affordable social housing. For more on this continue reading the following article from Property Wire.
Although renting privately continues to be regarded as a short term measure in the UK more people are renting for longer, according to a residential research report from property group Savills.
It points out that there were 4.3 million households in the private rented sector in the UK in 2011, according to the most up to date figures available, and the firm expects this to grow by a million over the next five years.
The research shows that the biggest group of private tenants is aged between 25 and 34. However, the fastest growing group of private tenants are aged between 35 and 44, a quarter of which are young families. They are what we call ‘Generation Rent’, and the firm points out that many will never own their own home.
The mismatch between supply and demand is driving up rents and forcing tenants into sometimes poor quality rental housing with little security of tenure.
In a survey of 2,300 tenants conducted by YouGov for Savills it was found that there was a greater desire for longer term tenancies among those over 35, while younger tenants prefer flexibility.
The survey also shows that the search for better quality housing was the main reason renters move. ‘We interpret this as a search for better standard of accommodation, better design and higher specification,’ said Margaret Street, director of residential research at Savills.
She explained that these findings provide an opportunity for housing associations offering market rent homes to distinguish themselves from the average buy to let landlord.
Households excluded from the property market are unlikely to qualify for state help today as social housing provision is focussed on the most vulnerable. However, a generation ago, support for housing was available for a wider range of families. According to a new report by the National Housing Federation, The Politics of Housing, in 1979, 20% of households in the top decile of the income distribution lived in social housing, compared with close to zero by 2004/2005.
‘The shift towards the private sector as the main provider of housing for those who can afford it, coincided with the rise in home ownership in the latter part of the twentieth century.
Change in social attitudes towards housing and welfare, as well as cut backs in affordable housing grants, means that the social sector is unlikely to become the main provider of housing,’ explained Street.
‘Now is the time for housing associations to tackle a different kind of housing need. With home ownership now in decline, housing associations could broaden their tenant base and provide a proportion of their housing at market rather than social rent,’ she said.
‘As this would be in addition to their current operations, the additional rental income could be used to cross subsidise other tenures,’ she added.
This article was republished with permission from Property Wire.