Housing inequality and soaring rent costs
The Department for Communities and Local Government (DCLG) released the 2013-14 English Housing Survey data yesterday, containing some remarkable news on the English housing market.
The press focused mainly on the news that outright owners of homes now outnumber the number of mortgage holders (said the Guardian’s Hilary Osborne, The Independent’s Ben Chu, The Telegraph’s Dan Hyde and the FT’s Kate Allen for example); and many spectators are rightly concerned that housing inequality is on the up as 48% of all households aged 25-34 now rent privately, up from 21% in 2003-4. Indeed, owner occupation in this age group has dropped from 59% in 2003-4 to 36% today, and over a third (36.6%) of all private renters are now aged 25-34.
In addition to these worrying trends, the past year has seen an explosion in private and social rent costs. This news was not featured in the headlines of DCLG’s English Housing Survey report, but their data make it clear.
Here is their graph, showing the cost of mean weekly rents across England from 2008-2014:
In percentage terms, the data show the annual growth in private rent prices was an astonishing 8.3% from 2012-13 to 2013-14:
High rent inflation has most acutely been felt in London. Private rent prices in London have fluctuated in the wake of the financial crisis but increased by a jaw-dropping 8.7% over the past year; most strikingly the consistent year-on-year increase in social rents in London, averaging almost 8% since 2009, will be affecting the least well off in the city hardest.
Rent inflation has also been sustained outside of the capital, with private costs reaching 3.7% last year. The inflationary trend in social rent costs – like London – has been more relentless, averaging around 6% since 2011.
Throughout England, the least well off are hardest hit by rent costs:
Given that young people are the last to benefit from the economic recovery, the news that English private and social rent inflation is so high is a great concern to those who are just starting out. With the prospect of house ownership disappearing further into the horizon, the news of the acceleration of rental costs is a real blow.