Thursday, 5 July 2012

UK’s torpid economy may flourish its rental market

Recent reports from Resolution Foundation and Shelter from Cambridge University notices serious implications that could been seen in the UK’s housing/property market given the economic indicators such as low economic growth, credit crunch, lower level of incomes, low levels of building houses.

If these indicators are going to going to show the same tendencies, then this would mean that half the UK’s population would opt for a rented house by 2025. Despite the crunch being felt, even in the mortgage sector, still there are a few out there who can afford to buy a home in UK through UK mortgage finance. But a continued weakened Britain economy would mean that the proportion of people who can own a home in UK through mortgage will be one among four households. This accounts to 27% which is much lower than what the percentage of 43, in initial 90s, on the percentage of home buyers in UK through mortgage finance.

That aside, the trend is welcomed by the private rented sector and the private landlords for; the lower mortgage finance will obviously make the Britons want to live in privately rented houses rather than choosing to own a house through mortgage loan.

This trend is further pushed by the families in UK with children. More than half the families of UK with children are now planning to rent a house rather than buying it through a mortgage loan. This increase is recorded at an 86%.

However, with the growing rental market in UK, there are many issues faced by the UK tenants. These prospective tenants, having no way out for a shelter, desperate, chooses to rent a house. The demand being more than the supply, these private landlords are seen to exploit the tenants by charging exorbitant rents and also do not guarantee a secured tenancy to the tenants. Therefore, with the growing rental sector in UK, it does become way too imperative for the government, especially the social housing sector to address the issues of stability and affordability in rents in the private rented sector.

This also means having to make provisions for renters of UK in terms of quality rented accommodation where the families can lead a better, secured, affordable life not only for themselves but also for their children. Institutional investment in private rented sector in UK would surely be a welcoming step that would better and strengthen the UK rent sector.

All in all, this seems to be for time the new reality of the housing market in UK – a flourishing rental sector over the house owning pattern. Having to be known the reality, the challenged faced, its time the government to do something substantial in terms of housing for the people of UK.


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