Nobody wants to read yet another article about how screwed young people are. I don’t want to write another one. And yet, today there are more reports of just how bad this country’s housing crisis really is.
While the Government continues to harp on about help-to-buy and buy-to-let, the reality is that there are many people who are trapped in the private rental sector for whom it would be optimistic to call home ownership a pipe dream.
The Government basically ignores the private rental sector which is in desperate need of reform, regulation and quality control (see our campaign to Make Renting Fair). In fact, all of our politicians, seem to be too preoccupied with their infighting and Brexit to do much about anything.
Today think tank, the Resolution Foundation, confirmed what we already know. Home ownership is falling in England because house prices have risen at supersonic speeds, far outpacing wage growth, for several decades.
Home ownership in England has now fallen to its lowest level in 30 years as a result of this ever widening gap between earnings and housing costs and, to those who dismiss the housing crisis as ‘London’s problem’, the Resolution Foundation says, categorically, that it has now spread to the North of England and the Midlands as well.
In Greater Manchester the number of home owners has fallen from 72% in April 2003 to 58% this year. In West Yorkshire, the urban areas of the West Midlands and outer London there have also been significant drops.
Explaining the falling rates of home ownership, Matthew Whittaker, Chief Economist from the Resolution Foundation, told the BBC's Today programme: ‘What we particularly have seen since 2002-03 is that incomes simply haven't kept pace with house prices, so it's not just that house prices have gone up.’
Looking at data from the Office for National Statistics the Resolution Foundation have found that home ownership in England was at its highest in 2003 when 71% of the population owned their own home, it’s not under 64% and falling.
The think tank also noted that the fall in home ownership corresponded directly with a rise in the number of people renting from private landlords.
Anyone on an average salary or less, who’s currently renting or looking at the possibility of buying a house (without help from the Bank of Mum and Dad) knows all of this already.
We don’t need reports to state the obvious, we need to know what the Government are planning to do about it. Fixing the private rental sector with its short tenancy agreements, extortionate fees, rogue landlords and lack of regulation would be a good start.
We don’t need to be told there’s a problem anymore, it’s time for solutions. _The Debrief c_ontacted the Department for Communities and Local Government (DCLG) to ask them what they’ve got up their sleeve, if anything. We also asked whether they accept that there is a ‘housing crisis’?
A DCLG spokesperson told The Debrief:
‘More than 300,000 people have been helped into homeownership through government-backed schemes since 2010, while more than a decade long decline in home ownership has been halted.’
‘On top of this, latest figures show that for the first time in 20 years, first-time buyers have borrowed more than home movers.’
‘However, we know there is more to do, which is why we’ve set out the most ambitious vision for housing in a generation, including delivering hundreds of thousands of homes exclusively for first-time buyers.’
That all sounds very impressive, but with an estimated 8.3 million people (at last count in 2013) currently relying on the private rental sector 300,000 people helped through help-to-buy just isn’t enough.
As to whether the Government plans to do anything about the private rental sector, the DCLG spokesperson told The Debrief:
‘This Government is committed to creating a bigger, better private rented sector, which meets the needs of both tenants and landlords.’
‘That’s why we’ve set out the most ambitious vision for housing in a generation, including £3.5 billion in Government-backed guarantees to attract more institutional investment into the sector.
‘We are doing all of this without the need for excessive state regulation that would destroy investment in new housing, push up prices and make it far harder for people to find a flat or house to rent.’
The Government might not want to step in to ‘regulate’ the private rental market but with rental costs increasing month on month and estate agents charging tenants whatever the like, surely it’s time to accept that the market can’t regulate itself? As the most recent English Housing Survey confirmed, this doesn't just affect the young. Renting is no longer a stop gap between leaving your family's home and buying your own. More and more families are being forced to live in privately rented accomodation. We need a secure, stable and safe rental market that works for tenants, not just serves the needs of lettings agencies and landlords.
Renting is fast-becoming the new normal, it’s time that politicians caught up.
You can find out more about our campaign to Make Renting Fair here.
You might also be interested in:
Here's How Much Millennials Will Spend On Rent Before They Reach 30
Follow Vicky on Twitter @Victoria_Spratt
This article originally appeared on The Debrief.