The number of households renting privately has risen by 74% in the past 10 years (2006 to 2016/17), with the number of families in private rented accommodation rising significantly, according to the latest government figures.
The English Housing Survey for 2016/17 – an annual survey of household circumstances and the condition and energy efficiency of housing in England – reports that 14.4 million, or 63% are owner-occupiers, 4.7 million, or 20% of households rent privately, while 3.9 million, or 17%, rent in the social rented sector. This remains the same as in 2015/2016, though there are some significant changes within particular age groups and types of households over the past 10 years.
The number of tenants with children who rent privately, for example, has gone up steeply over the past decade. While there were 800,000 families in rented accommodation in 2006/7, this has risen to 1.8 million by 2016/17.
Over the past 10 years, there has also been a big increase in the proportion of 35- to 44-year-olds renting privately – up from 11% to 29%. This mirrors a big drop in the number of people in this age group who are owner-occupiers. This has gone down from 72% to 52% in the 10 years to 2016/17.
While 27% of those aged 25 to 34 rented privately in 2006/7, this has risen to 46% by 2016/17. Over the same period, the proportion of 25-34 year olds in owner-occupation has dropped from 57% to 37%.
The survey also revealed that the average age of first-time buyers is now 33 years old – up from age 30 in 2006/7. There are more homeowners who own their homes outright – over the past 10 years, this has risen by 21%.
Some 60% of private renters still aspire to buy their own property – the same figure as 2015/16 – but the number of social renters who expect to buy has gone up from 27% to 30% over the same period.
Tenants who rent privately, on average, spend 34% (excluding housing benefit) of their income on rent, while social renters spend 28%. This compares with homeowners typically spending 19% of their household income on mortgage payments.
In London, private renting was the most prevalent tenure (30%), followed by outright ownership (25%). A smaller number of households were buying with a mortgage (22%) or renting in the social sector (22%).
A mistake to focus on homeownership’
Polly Neate, chief executive of housing charity Shelter, comments: “With the number of renters having risen substantially over the past decade, it’s time to start paying attention to the needs of people who rent long-term, not just those who have a chance to own. It would be a mistake to focus on homeownership for the minority at the expense of families left to suffer expensive and insecure private renting.”
She adds: “To give renters a better deal, the government must make good on its promise to massively increase the number of affordable homes available for ordinary families to rent.”
Daniel Hegarty chief executive of online mortgage broker Habito, adds: “The survey results clearly show that homeownership is still an aspiration for the majority of Britons – with 60% of private and 30% of social renters intending to buy a home at some point in the future. There is a clear benefit to getting on the property ladder, as mortgage payments tend to be considerably lower than rental commitments. Yet, with rental costs accounting for more than a third of the average household income, many are left with little to save at the end of the month.
“More and more people are relying on their parents and even grandparents to help them get on the property ladder, fueling the disparities between those who can call on the Bank of Mum and Dad and those that can't.
“It is also taking longer to get a deposit together and jump on the property ladder, with the average age of first-time buyers now at 33 – up from 30 a decade ago. Phillip Hammond’s decision to remove stamp duty for first-time buyers last year was met with mild positivity. However, it is clear that those cuts alone are not enough to help young people on the path to homeownership.”