AppId is over the quota
AppId is over the quota
Those who rent pay out over twice as much of their income on their accommodation than homeowners spend on a mortgage, new figures reveal, a financial penalty for a generation unable to buy a home, say charities.
Statistics released on Thursday in the English Housing Survey from the Department for Communities and Local Government, show that renting is a way of life for increasing numbers in almost every part of England.
With house prices still high, many put off owning their own home until they are cash-rich. The survey shows almost a third of first-time buyers are over 35. The changing demographic means those who rent are now tending to be an older and more affluent, with average incomes rising faster than those of homeowners.
The data shows that the median incomes of private renters grew by 11.2% from 2008 to 2011. During the same period homeowners’ median incomes grew just 2.5%.
Although the travails of the London property market are well known, the high cost of housing means that one in four Londoners are tenants. This pattern has spread all over the country.
The East Midlands saw the fastest growth in private renting between 2008 and 2011, with a 44% increase in the number of households renting, closely followed by the north-west with a 43% rise.
There is a widening gap in costs. Among owner-occupier households weekly mortgage payments were, on average, 19% of their gross weekly income. For private renters, weekly rent payments were on average 43% of their gross weekly income.
In cash terms mortgage payments averaged £143 a week. This compares with average weekly rent payments of £160. The difference, say Shelter is £75 a month.
Campbell Robb, chief executive of Shelter, said: “It’s common knowledge that renting is fast becoming a way of life for a whole generation of Britons locked out of the housing market, and today’s figures show that renters are growing in number in almost every part of England.
“But what we’re seeing now is that renting is becoming the ‘new normal’ for a much wider group of people, with over a million families now renting their home from a landlord. This means that increasing numbers of children are growing up stuck on a merry-go-round of home after home, without the stability their own parents enjoyed when they were young. Today’s figures show that private renters are 10 times more likely than homeowners to have moved house in the last year.
“Renters in this country get a tough deal, struggling with expensive rents while living with the knowledge that they can lose their home at any time with just two months notice. Britain may call itself a ‘property-owning democracy’ but we can’t ignore the new reality of renting. It’s time that government realised that renting is the only option for more and more families every year.”
Housing minister Grant Shapps said: “Private renting provides a flexible option for those who choose to rent, as well as those saving up for a deposit on their first home. And while last year mortgages for first-time buyers accounted for a third of the total market, only 12% went to buy-to-let landlords.
“But I’m also pulling out all the stops for those who want to get on the property ladder. That is why in March the prime minister and I launched the NewBuy Guarantee scheme which is expected enable up to 100,000 aspiring homeowners to buy newly built properties with just a fraction of the deposit they would normally need.
“The government’s FirstBuy scheme also offers a valuable alternative to the Bank of Mum and Dad and nearly 3,000 new homeowners have been created thanks to this policy.”