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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Families in London need, £ 3, 500 per month to afford a rented home

A report analysis, Homes for London campaign, by Shelter, analyzed the cost of renting across the capital . The report showed that people in London needs to earn £3,500 per month, making it a total of £ 52,00 per annum to afford themselves rented property in UK.  More important, that this amount is needed to afford a two bed house only.

However, if you're eyeing to be a tenant in eight London boroughs including Hackney and Tower Hamlets, then they would need to earn more than £60,000 per annum.  The numbers of tenants under private renting have increased to about one in every four households and on the same, even the rents have risen by 7% in 2011.

Keeping the economic downturn in mind, many people are coming to London for work, and with the current trend, as such earning is a hard thing, and on top almost many tenants spend half their incomes on paying rents. This brings us to question the trend of high rents and its detrimental effect on tenants'' savings.  If this rate of rent is to continue, then this will seriously pose financial for tenants the challenge of struggling financially, in the already finically odd time.

Shelter chief executive Campbell Robb said: "With so many Londoners locked out of homeownership, more and more families have no other option but to rent – but rents are now so out of touch with wages that some families are spending over half of their income just to keep a roof over their head, leaving little left for food, fuel and other essentials."

The only thing that Homes for London campaign is asking for lowering or at least regulating the private rented sector, so that the private landlords don't charge the economical /vulnerable tenants high rental charges.  For this, the Homes for London campaign is wanting the next mayor to stand up for this cause and help influence the sector by formulating local policies that will help bettering the position of the tenants and prevent the capitalist tendency of the private landlords when they charge high rents, or deny repaying the tenant deposits, or any of such scrupulous acts performed.

This was seen true in an Ipsos Mori poll released last week, where the people of London, more precisely, the tenants in London have had only stressed on making policy with the mayoral candidates to chalk a way to reduce the cost of private renting.

Since, in this hard hit economic time, buying and selling home doesn't fetch you a regular income, renting does exactly what you need. It is this very mentality attached to renting, that has made the minds of the landlords, private landlords especially, capital minded.  If the landlords can get a steady monthly income, then why not increase and earn more in these times? This very mindset makes leads to tenants' exploitation. This is why we see, the value of let homes in UK mounting to £840bn. If this trend continues for a long then by 2016, we'll see the rental incomes generated by the private landlords shall be to the tune of £70bn.

With the problems of house building happening to the minimum and the demand increasing as hell due to the increase in population, changing needs of ageing population, the changes in family pattern, the break-ups and divorces, have all led to an exceeding demand not able to keep pace with the supply.

Keeping in mind the problems, UK needs policies and laws both at state and national level to ensure its people their right to live in a house, securely and safely.

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Social housing in UK

Housing plays a central role by providing a roof; it ensures a quality life to us in the community and society that we're all a part of.  But many people unfortunately cannot make it to buying a house of their own, so they simply choose to rent and stay. However, you might not be as lucky in today's market driven world to get a well, furnished house at a low price.  This situation is true for all the people of all the countries. Needless to say that such situation also arises in fist world or developed countries.  This doesn't mean that there is no way out to get your head under a roof; called home, even at if you don't earn much, for there is the provision of social housing facility.

What is Social Housing?

Social housing UK is a governmental provision in UK, where the houses are being rented at lower prices, much more affordable, with secured tenure to the people who are in need of house and have no option left than being homeless.  Social housing as a facility is always provided by councils and non-profit organizations. There are many housing associations which provide such services. In UK, the service of social housing is provided by several of such organizations apart from the government side.

The main aim behind the service is to provide rented housed to low income group people at affordable rents ensuring them with secured tenancy.  Further, unlike private rented sector, in which there are no need criteria, where the deal is fixed on the basis of the money you're able to shed, the home under social housing is rented only and only if you are eligible on certain criteria, the most important being, that you're in utter need of a roof above your head and that you've zero options left and hence have come to rescue yourselves at the behest of social housing facilities.

According to the 2005 statistics, from the Office of the Deputy Prime Minister (ODPM), there are 20.5 million residential in England, of that; 3.6 million are classified as "Social Rented houses".  However, at present, the situation is gloomy as UK housing associations are facing hikes in their pension contributions after the Social Housing Pension Scheme deficit soared to over £1 billion in the past three years.  Else from that, keeping in mind the poor economy of UK, it is observed that there shall be a rise in the demand for social housing.  Under the current bad economic scenario faced by UK, the growth of the social housing sector would remain at around 2.5% .  This means demand to get doubled than the supply.

All, in all, with the present circumstances at the way, for all those on the brink of homelessness, has only an option of social rented houses, marking a ray of hope.  But, even in that, with factors such as rising rents in private sector, unemployment, poor economic performance and stagnant economy, there could be much more demand for rented houses and more so for social rented houses. Unable to contain the demand, might lend UK government and population into a grim state of affairs. Having to know this, the government should seriously consider steps to regulate the social housing market, housing market on whole and work on bettering the economy.

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Need for regulating the private renting sector

Housing is the essential most need for humans. In UK, with the ongoing trend of economic downturn, this basic necessity is literally now turning into a luxury with the private landlords trying to charge much more to the tenants than usual.

Unusual growth of the private renting sector has made lives hard for the tenants. More often, issues regarding safety and security of tenancy are neglected by the private landlords. There are many cases to prove this fact. One of such recent case in the sector was investigated by Guardian's journalist; Amelia Gentleman who helped unearthed the corruption occurring in the sector.

Guardian's journalist exposed how many of the vulnerable and low income earning's tenants are asked to pay exorbitant rents for merely a shed with a toilet. Examples of such practices are rampant and widespread.  This makes it a total visible case of corruption in the private rending sector, of how heinously, the private landlords are cashing on the situation of lower supply and higher demand of housing in UK.

With the further deteriorating economic condition in London and South East, the minimum wages of the low income workers are seen falling below their real wages, making them so vulnerable at the hands of private landlords.

This phenomenon serves as the latest example of how capitalists rule the society and how they exploit, till date the needy and destitute.
Other problems faced by private tenants are that of high energy costs, absence of security of tenure and landlords' reluctance to repair to improve the property.

If this trend is to continue more, then this will only lead to an addition in the already increased demand, thereby increasing the rents, and those, in utter need, most of the time the poor, get pushed aside and denied of their right to live in securely and safely.

This problem needs to be solved for housing is a basic need for poor as well as wealthy in a nation and to provide a secured roof to its citizens is the foremost duty of the state. Keeping the fact in mind, there is a dire need for regulating the private rented sector.

Regulation of private renting sector needs to be made in the form of holding licenses for private landlords a compulsion. A compulsion should be made for all the private landlords, in fact all the landlords, to hold the license, and only that shall act as a basis for trading. Besides, the license, they should also be guaranteeing on adhering to certain standards required and letting a property that is genuine.

The task of this can be given to professional property management companies, who shall also see that the regulation is followed and implemented on, regularly.

All in all, there is an utter need to regulate the private rented sector, before it expands exponentially at this chaotic speed and exploits the poor further.

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