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Under-35 mortgage borrowing falls

Sarah Davidson

July 23, 2014

In comparison 45% of 25-34 year olds were in privately rented accommodation, compared to 31% in 2008/09.

The private rental sector overtook the social rented sector, with 18% of households (4 million) privately renting compared to 17% (3.7 million) who socially rented.

Owner occupiers accounted for 65% of the 22 million English households in England, standing at 14.3 million.

David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services, said: “The property market has been suffering from a lack of new supply, and building levels remain around half the level we need, despite some progress.

“This will keep buying a home a challenge for some, especially when combined with strict mortgage affordability rules and the latest constrained wage growth.”

Owner occupiers buying with a mortgage spent an average 20% of their income on their mortgage, while private renters spent 40% and social renters 30%.

Rents stand at £747 per month, having risen by 1.4% in the last year, while landlords saw their total returns reach the highest level since June 2010, at 11.8% per annum

The number of tenants in rent arrears fell to 7.8%, down from 8.3% last June.

David Newnes added: “With housing costs making up such a big section of monthly budgets, it will be encouraging for many tenants that rents are going up more slowly than other household bills.

“Thanks to extensive investment by landlords the supply of homes to rent has grown rapidly, and this has restrained rent rises.

“But while the private rented sector is becoming cheaper in real terms, the cost of living challenge continues. And this is because wage growth has been constrained.”


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