Renters have been through too many years of hurt, it’s time things changed. Our new research shows private renters are having to spend a massive £41bn in rents per year.
For context, this is four times the amount the government spends on affordable housing.
And (since we’re all obviously in the midst of World Cup fever) this could even buy the England squad in about a week – or the Brazil squad in a little over that if you prefer.
What’s more, the total rent bill has been catching up with the total mortgage bill. Our research also shows that, since 2000, the total spend on private rents has soared by around 350%, compared to around just 60% for mortgages. There are a couple of key reasons for this.
A huge rise in the number of renters
Since 2007 the number of households renting privately has soared by 74%, while the number of mortgaged homeowners has fallen by 20%. Unsurprisingly this has changed what the housing market in England looks like quite a bit, with just over 60% of households being owner occupiers and 20% renting privately.
In addition, many of these new renters are families with kids, for whom a secure home is obviously particularly critical.
Soaring cost of renting
At the same time that the number of renters is increasing, the cost of renting is going up as well. A decades-long failure to build anywhere near enough homes, especially affordable homes, has left renters little choice but to stump up of huge chunks of their wages on rent. This means that today private renters on average spend around 40% of their income on rent, double what mortgaged households pay at 19% of their income.
All this has created a shift in the housing market. The idea of renting for life no longer seems unusual. The idea of buying, in contrast, seems increasingly out of reach.
No longer is renting a stop gap for young professionals before the inevitable life of home ownership. This is how many families will have to live for good.
And yet, these significant shifts have not been matched by changes in thinking.
Renters are becoming a voting force in their own right
Consecutive governments have failed to prioritise improving the experience of the private rented sector, something that needs to change. Not only because people need and deserve a secure and affordable home, but also because renters are increasingly becoming an electoral force in their own right.
The 2017 general election gave us a peek at this, with some commentators judging the swing to Labour in places like Canterbury the ‘rentquake’. This is an issue we’ve looked at as well and noted that turnout among private renters is increasing, and they are far more likely to rate housing as one of most important issues facing their family.
This means all parties should be thinking urgently about making sure their housing offer includes an offer for making renting better. This can be done by giving renters longer more secure tenancies so landlords can’t evict people at the end of their contract for no reason (something which, many will be astonished to know, can happen today in England). And secondly, we’ve just got to get on and build more homes that are genuinely affordable.
To find out more about the growing political salience of young private renters, read our briefing.