Government must support property investment in private rented sector
Added 11.03.10
The British Property Federation (BPF) is holding up the recent findings of English Housing Survey as another reason that the UK should have a more professional rental market similar to Europe and America where large rental blocks exist, much like retail parks or hotels.
The BPF has long advocated that this will improve quality and choice and says that firms like Aviva have been reported as being ready to step up with investments in large rental pilots backed by the Homes and Communities Agency and the Mayor of London.
The Federation points to the fact that the government-commissioned English Housing Survey confirmed home ownership had fallen to its lowest level in 20 years with just 67.9 percent of English households owning their home, the lowest percentage since 1991.
There was a decrease in the number of owner occupied households from a peak of 14.8 million in 2005 and 2006 to 14.6 million in 2008-09. In contrast the number of households renting privately surged by one million since 2001, from 2.1 million to 3.1 million in 2008-09.
Private rented sector (PRS) housing has accounted for nearly all household growth over the past decade, with 1.1 million additional households in the sector versus 2000. The PRS is up from 13.9 percent of households in 2008 to 14.2 percent in 2009.
There are almost as many families with children in the PRS as there are in the social rented sector. The latter is dominated by retired people and lone parents.
Only 11 percent of private renters are dissatisfied with their accommodation, compared with 16 percent of social renters and there are twice as many people in full time work in the PRS as in social renting.
But worryingly, says the BPF, millions are living in non-decent homes. The government report says that 33 percent of households are ‘non decent’. This equates to around 20million people living in below standard housing, based on the 7.4 million households the report specifies as ‘non decent’. More than a quarter of social housing is below-par.
Liz Peace, chief executive of the BPF, said: “We’re seeing massive demand for private rented housing in the wake of crippled mortgage markets and soaring levels of people who cannot afford to buy.
“The government must do something to deal with this demand or we will end up with the crisis getting far worse. The number of people living in non-decent homes shows a vital need for new investment and our view is that, with mortgages unavailable to many, this finance will have to come from institutions like pension funds that have large swathes of capital to invest.
“We should look at the housing models adopted in the USA and Europe where renting is socially acceptable and standards are higher because their governments have embraced professional corporate landlords.”
News feed courtesy of Residential Landlord