Almost one in four households in Britain will be renting privately by the end of as soaring house prices and stagnant wages put home ownership out of the reach of growing numbers of people. This is set to rise to 5. It commissioned a YouGov survey of more than 10, tenants and spoke to 26 major investors. The report says that while at least three-quarters of UK renters are living in homes owned by private landlords, they will increasingly rent from large-scale corporate landlords such as City firms and property companies.
The proportion of households living in the private rented sector has doubled over the last decade, as rising house prices coupled with stagnating wages have put the dream of owning a home out of reach for many, especially the young. The institutional setting in the U. First, in contrast to continental European countries, which implemented rule-based planning systems, the U. In this system, each change of use for any land parcel triggers a public consultation process and must be approved on a case-by-case basis by a local planning authority.
Second, the U. In these areas, positive demand shocks have the main effect of increasing land and house prices , leading to a severe housing affordability crisis in large parts of the country, and arguably in part explaining the fall in homeownership attainment since the early s.
Housing in the U. The same comparable apartment in London is also the second-most expensive to rent, again topped only by Hong Kong. The birth year of social housing in the U. The house-building boom continued through the s, but, near the end of that decade, the emphasis shifted toward slum clearance. By the early s, the downsides of social housing lack of investment and maintenance, negative peer effects became more visible.
In , housing associations outstripped local councils for the first time in providing the majority of social homes in the U. Housing associations are private, nonprofit organizations that provide low-cost housing for households in need of a home. They have been operating an increasing share of social housing properties in the U. Although formally independent of the government, housing associations are regulated by the state and receive public funding.
Nowadays, local authorities and housing associations rely on a point or band system based on housing needs to allocate social rental properties to households, with each council having its own specific set of rules. Households in critical need of housing—such as the homeless, households living in overcrowded conditions, or those with medical conditions aggravated by their current property—are, in theory at least, more likely to gain access.
In brief, the policy allowed social tenants to purchase their homes at a significantly subsidized price, with the effect that some of the best social housing stock moved from socially rented to privately owned. Right to Buy is a crucial factor in explaining the significant rise in homeownership from until The private rental market has persistently increased its share of the housing stock since the s, displaying a clear upward trend up to around , when it appears to have stabilized see Figure 1.
The revival of the private rental market has arguably been driven primarily by market forces and innovation. First, the price-to-rent ratio roughly doubled between and , making owner-occupied housing less and less affordable. Policies may also have contributed to the revival and subsequent stabilization of the private rental market. In particular, the persistent decline of the private rental market may have been curbed by the adoption of the Housing Act, which introduced the Assured Shorthold Tenancy as the default legal residential tenancy in England and Wales.
This amounts to almost 4 million social renters in You need a Single Account for unlimited access. Full access to 1m statistics Incl. Single Account. View for free. Show source. Show detailed source information? Register for free Already a member? Log in. More information. Other statistics on the topic. Residential Real Estate England: average weekly rent of private renters Profit from additional features with an Employee Account. Please create an employee account to be able to mark statistics as favorites.
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