In 1952 around half the population were renting their homes. Compare that to 2011 when 20 percent are living as tenants and you get a sense of how much the housing stock has changed over 60 years and why housing costs matter to people who pay private rent.
As we’re talking percentages its worth giving that some context by stating that there are now 27 million homes in the UK compared with 14 million in 1952. As you would expect London and the south east have seen the largest increase in house building and values over that period.
In makes sense then that the media pays a lot of attention to mortgage interest rates. If the figures above are to be believed then there are 23 million homes are owner occupied with people repaying a mortage. However with the number of people renting increasing year on year the level of rent being paid is becoming relevant.
If its accepted that there are around 5.4 million people renting their home it makes sense to pay attention to how much they are paying in rent.
Any number of reports have suggested that nationally rents are increasing. The LSL report has consistently reported increasing rents over the last year or so.
Average rents across England and Wales haven risen by and stand at £709 per month – 2.4% higher than year ago.
Why does it matter if private rent goes up?
Broadly speaking there are two types of tenant. Private tenants renting from private landlodrds and public sector tenants reining from housing associations and local authorities.
Private tenants occupy their homes with relatively limited security of tunure and rents are set by the market rate. Whilst the government has some control over rents being charged in public sector there is virtually no control over private rents.
This matters because private rented property is typically occupied by a higher percentage of lower paid workers, or people not in work. Many of these people are in receipt of Local Housing Allownace (LHA) to help pay the rent.
Contrary to popular belief there are more “in work” claimants on LHA receiving partial benefit than those getting their rent paid in full. So when rents go up there is an impact on the public purse.