The Mortgage Works’ latest Private Rented Report has unveiled significant changes within the sector, highlighting an 80% increase in renters aged between 55 and 64 over the past decade. This report comes as the new government pledges to address the ongoing housing crisis.
Increase in Older Renters
According to the report, the number of people aged 55-64 renting privately in England has surged by 80% over the last ten years. This contrasts with a decline in homeownership rates for the same age group, which has dropped by approximately 10% since its peak in 2007. Damian Thompson, Director of Landlord at The Mortgage Works, noted, “Understanding the dynamics of the private rented sector has never been so important. The sector continues to support the lives of millions of people across the UK by providing homes for those who either can’t afford to buy or prefer not to own a home.”
Dominance of Professional Landlords
The report also highlights the growing influence of professional landlords. The proportion of landlords owning five or more properties has more than tripled from 5% in 2010 to 18% in 2021. These landlords now command nearly half of all tenancies, significantly impacting the rental market. Thompson remarked, “The Mortgage Works report provides in-depth market analysis that will help identify trends and the critical areas we must collectively address if we are to make a difference.”
Impact of Rising Interest Rates
With around 350,000 buy-to-let fixed-rate mortgages due to mature within the next year, the report warns of potential payment shocks for landlords refinancing their properties. This could lead to an average increase of £225 per month in payments, potentially affecting rental market dynamics and tenant affordability.
Regional Rental Growth
London has seen the most significant rise in private renting, with nearly one in three households opting to rent privately due to high house prices and increased mortgage costs. This figure is almost double that of the rest of England. Additionally, Office for National Statistics (ONS) data indicates that rental growth has reached unprecedented levels in recent years, with some regions experiencing double-digit increases. This growth underscores the high demand for rentals amid a shrinking supply and increased barriers for first-time buyers.
Moving Forward
The report underscores the evolving landscape of the private rented sector and the need for comprehensive strategies to address these changes. As Thompson stated, “We look forward to understanding the new government’s plans to create a stronger, fairer private rented sector, where legislation works for both landlords and tenants.”
The findings highlight the importance of continuous market analysis to inform policy and investment decisions, ensuring the sector can meet the diverse needs of the UK population. With these insights, stakeholders can better navigate the challenges and opportunities within the private rented sector, aiming to create a more balanced and sustainable housing market for all.
