Renters priced out of the market
The comments come after government data published last week showed a rise in the number of households in England renting privately.
Nigel Terrington, chief executive of Paragon, said: “Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline.”
The Communities and Local Government’s English Housing Report revealed that the number of households renting privately has risen by one million since 2005-06, from 2.4 million to 3.4 million in 2009-10.
The private rented sector now accounts for 15.6% of all households in England up from 14.2% in 2008-09 and 11.7% in 2005-06.
The report also showed there has been a decrease in the number of owner-occupied households from a peak of 14.8 million in 2005-06 to 14.5 million in 2009-10. The proportion of households in owner-occupation has been in decline since 2003, falling from 70.9% to 67.4% during the period.
The proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.0% in 2009-10.
Terrington said: “The CLG’s figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector’s importance to UK housing continues to grow as increasing numbers of people opting to rent privately rather than step on the housing ladder.”
The report showed that the private rented sector encompasses a wide range of economic status – 60% of households are in full-time employment, 9% in part-time work, 7% are unemployed, 8% are retired and 11% are classed as ‘other inactive’. Half of all private renters are aged under 35 with half a million (15%) aged 16-24 and 1.2 million (35%) aged 25 to 34.
Couples with no dependent children are the most common type of household in the private rented sector (26%), with one person households under 60 being the second largest household type at 23%.
Lone parent households are more common in the private rented sector with 12% of private renters in this category compared with 3% of owner occupiers.
Terrington added: “With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2015, it is crucial that adequate levels of buy-to-let mortgage finance are available to enable landlords to expand the number of properties in the PRS.”