Private renters fear they may never afford to buy

New homes

Nearly two thirds (59%) of private renters in England never expect to buy their own property because they won’t be able to afford one.

The latest English Housing Survey figures show there has been a noticeable increase in the amount of renters saying that affordability will stop them from owning their own home.

In 2015/6 this was 70%, compared to 56% in 2008/9.

Private renters spend on average 35% of their income on housing costs, compared to those who own their home spending 18%.

The Local Government Association (LGA) said councils need powers and funding to create a mix of affordable housing options, both for renters hoping to save up for a deposit and those looking to buy, to help boost affordability and home ownership.

The LGA, which represents more than 370 councils in England and Wales, is also concerned that: 

• One in five (21%) private renters are dissatisfied with their tenure, compared to less than 1% of owner occupiers. Just 2.7% of renters said they rented because they preferred the flexibility of the tenure, suggesting that most renters would like to own, but cannot afford the home that they need. 
• With the average homebuyer expected to pay 7.6 times their annual wages for a home, many renters are locked out of the housing market.

The LGA said councils need to be given additional freedom and flexibilities and access to funding, to resume their historic role as a major builder of affordable homes – including those for social and affordable rents - to boost affordability and home ownership.

This means being able to borrow to build and to keep 100% of the receipts from any homes they sell in order to replace them.

Martin Tett, the LGA’s Housing spokesman, said: “It’s worrying that so many people renting a home feel a sense of home-owning hopelessness.

“We know that the shortage of houses is a top concern for people as homes are too often unavailable, unaffordable and not appropriate for the different needs in our communities.

"All types of homes - including those for affordable and social rent – have to be built to solve this shortage, boost affordability and increase home ownership.

“For this to happen, councils desperately need additional flexibility, and access to funding, to resume their historic role as a major builder of affordable homes.

“This means being able to borrow to invest in housing and to keep 100% of the receipts from properties sold through Right to Buy to replace homes and reinvest in building more of the genuine affordable homes our communities desperately need.”