Many new tenants in the private rental sector are former home-owners who have opted to become tenants due to the increasing financial pressures associated with home ownership.
In fact more people are quitting home ownership to become private tenants, than are leaving the private rental sector to become home-owners.
The “Generation Rent” trend was identified by the English Housing Survey, which estimated that there were 22 Million households in England in 2011/12.
The trend underlines the fact that home ownership levels in the UK have continued to fall over recent years as the number of households in private rental sector accommodation has increased.
- 65% of property in the UK is owned by the occupiers
- 17% are private rental sector properties
- 17% are social housing
In 2005/6 the number of owner-occupied homes was recorded at 14.8 Million, but in 2011/12 this figure dropped to 14.4 Million. Conversely, in 2011/12 the number of private rental sector properties has increased to 3.8 Million, up from 2.4 Million in 2005/6.
The English Housing Survey also found that average gross household annual income was £40,500 (GBP) for home owners, £30,100 (GBP) for private tenants, and just £17,600 (GBP) for social tenants.
Home owners typically spent on average £141 on mortgage payments, while social tenants paid an average of £83 a week on rent, and private rental sector tenants spent an average of £164 a week, dispelling the myth that private tenants have more disposable income to spend on luxury items such as sky tv packages.
The English Housing Survey also found that
- 70% of private sector tenants had their deposits returned in full,
- 17% received part of their deposit money back
- 13% had none of it returned.
- 26% did not know if the deposit had been protected in the first place.
59% private rental sector tenants surveyed, wanted to buy their own home at some point in the near future. However, the survey discovered that 150,000 owner occupiers chose to sell their property and move into rented property, while only 116,000 tenants moved into purchased properties.
Tenants were also asked why tenancies had ended:
- 81% of tenancies ended because the tenant wanted to move
- 10% ended their tenancy by mutual agreement
- 9% of tenants were asked to leave by their landlord or lettings agent.
Of those who were asked to leave, 55% said it was because the landlord or agent wanted to sell the property or use it for themselves, whilst the remaining 46% cited other reasons, including difficultly paying rent, non-payment of rent, or problems with claiming Local Housing Allowance (LHA).
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