The recent cost of living crisis, record levels of inflation, rising mortgage rates and affordability limitations have certainly placed additional pressure on the finances of a vast number of households across the UK. Inevitably, these influencing factors will continue to have a huge impact on the plans of FTBs, tenants, existing homeowners and landlords.
First-time buyers remain the heartbeat of any healthy housing market and it’s clear that lenders and the government need to work collaboratively to generate a wider array of affordable options and solutions to help more FTBs to get onto the housing ladder. And this is especially evident as we come to the end of the Help to Buy scheme. However, as suggested by Richard Rowntree, Paragon Bank Managing Director of Mortgages, when commenting on new analysis of Government data – too much policy focus is being placed on getting younger tenants onto the housing ladder.
It's been evident for some time that the importance and value of the private rented sector are often underestimated at the highest government levels and greater consideration needs to be placed on its shifting dynamics and in the delivery of suitable housing. Especially when it comes to meeting the needs of a growing number of older tenants who are living in the PRS for longer.
The aforementioned government analysis from Paragon showed that the number of middle-aged households privately renting has nearly doubled in the space of a decade, rising from 691,000 in 2011 to 1.18 million in 2021, with many set to remain in rented homes for the long term. Over a fifth of those aged between 45 and 64 were reported to have lived in privately rented accommodation for more than 15 years, with a further 17% in the sector for between 11 and 15 years.
This age group experienced the greatest growth in the number of households in the private rented sector over the period. The number of households privately renting aged 65+ increased by 38%, with those aged between 34 and 44 increasing by 21%, whilst the 16–34-year-old group increased by just 3%.
In addition, a survey of over 2,000 tenants from Paragon showed that whilst the desire to own a home is high amongst the 45–64 age group, the ability to buy is inhibited. 47% of this age group expressed a desire to buy their own home, yet only 19% are said to be actively saving towards buying a property. Of the 19% actively saving to purchase a home, 25% have their finances in place and are searching, with 4% in the process of purchasing. The remainder (71%) are in the savings phase.
Many people are under the assumption that the PRS is simply a holding pad for the younger generations who are striving to become homeowners at some time and that rising rents are simply a barrier to these aspirations. It’s this kind of thinking which is consistently devaluing the PRS and casting many landlords as greedy profiteers rather than being portrayed as an honest provider of good, quality housing which such a strong proportion are.
So, it’s time to get rid of unwarranted perceptions and to concentrate on helping landlords to provide homes which match ever-changing PRS demographics and deliver some much-needed support for a variety of tenants in some challenging economic times.
