Pressure continues to build in the housing crisis in London, with many young people being priced out of the city where they were born. Years of neglect are taking their toll. Over the years, politicians have failed to address the problem of the housing shortage. Not enough homes, including affordable housing, have been built and it is now having an effect on the rental sector too.
Last year, 28.1% of people living in the capital were renters. This year it is up to 30%, according to figures by the English Housing Survey, which is the government’s yearly analysis of the market. Savills analyst, Lucian Cook, said the survey shows severely-restricted access to owning a home is putting even more pressure on the private rental sector. London is, obviously, at the sharp end of the crisis with high demand and extremely high property prices.
The situation in the rest of Britain needs addressing too. The number of households living in privately-rented properties has soared by 74% in the past 10 years. These households are spending an average of 41% of their wages on rent. By contrast, households paying off mortgages spend 19% of their income on housing.
The largest age group in private rentals is the 25 to 34-year-old bracket. Figures show home ownership for those aged 45 or less has fallen by one million in the past eight years. Many are having to save up for years for a deposit to buy property, while others realise they will always be living in rented accommodation because property prices are so high. With demand so high for rental accommodation, along with tax changes and a ban on agency fees, it is likely that the cost of renting will go up this year.
A survey by property consultants, McBains Cooper, shows four in 10 tenants expect to be living in rented accommodation for as long as 10 years. This shows the sector is still an attractive investment for buy-to-let landlords, despite the changes to taxes and increased legislation. The study also reveals that tenants are looking for room size, outdoor space and affordability when choosing a rental property. Extra benefits such as communal space or sports facilities are not so important. Demand will continue to grow for decent, affordable rental properties in much of the country, with analysis from Savills revealing a further one million households will be looking to rent rather than buy in the next five years.
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