Private renting grows; house prices won’t get back to peak until 2021

The FT reports on the latest annual English Housing Survey that shows that the number of households renting from private landlords has overtaken those living in social housing for the first time in half a century.

The number of owner-occupied homes decreased from a peak of 14.8m in 2005 to 14.4m in 2011-2012, while there had been a corresponding increase in the number of privately rented households from 2.4m to 3.8m over the same period.

The growth of the private rental market is driven by a shortage of social housing and the increased deposit size needed to buy a home. The trend, the paper says, threatens to undermine George Osborne’s hopes of reducing UK’s £23bn annual housing benefit bill.

More than 40% of this bill goes to private landlords. The figures also show that housing benefit subsidises the rents of one in four private tenants.

The report also reveals that those aged 65 and over are by far the largest group of owner-occupiers, making up 4.3m of the 14.4m homeowners in England. There are 2.6m in the 35 to 44 age group and 1.4m in the 25 to 34 range.

Separately, the FT highlights how, over the past decade, buy-to-let landlords have prospered.

PricewaterhouseCoopers has predicted that despite recent signs of an upturn in the housing market, it could take until 2021 for average prices to return to their pre-crisis peak, once the effects of high inflation are taken into account.

Chief economist John Hawksworth believes prices will not take off, because getting a foot on the property ladder still remains impossible for many.

Sources: Financial Times & The Daily Telegraph

We say: What? Getting on the property ladder impossible? Even with the banks clamouring about their higher loan-to-value offerings to help homeowners, and the government launching schemes to help, left right and centre? Surely not!

It’s hard to say whether Mr Hawksworth is commenting on the ‘many’ who expect loans without any form of deposit at all (because you used to be able to), or the ‘many’ stuck in negative equity situations, or the ‘many’ who just don’t have the bandwidth to save for a deposit due to their financial circumstances….or perhaps some of the ‘many’ victims of lenders not putting their money where their PR machine is (“but the computer says no….”), or that the widely-reported government schemes aren’t quite reaching those who need it.

It’s a difficult one to resolve – some might say the easiest way to get on the property ladder these days is to walk to market, exchange an old milking cow for three magic beans, and grow your own, just like Jack did.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

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While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


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