Analyzing/Bifurcating UK’s housing market into homeowners, tenants and people leaving through mortgage

According to the latest data revealed from Department for Communities and Local Government (DCLG) shows marks the end of UK's property owning democracy.  The European economic downturn has changed the living landscape of Britons.

Report further shows that the trend of owning a home has registered a sharp decline from 71% to 61%, which almost amounts to 14.8 million in 2005 to 14.5 million in2009 -2010.

The particular reason for this decline can be attributed to the fact that buying a home in UK today has become only remained a dream come true for few. As the time has caused much more expense, Britons, already covered by the blanket of economic crunch, have whatsoever no liquid cash to buy a home. This is true especially for the low income bracket of UK, which outgrow in population than the higher income group.  So what generally these Britons do is, they seek mortgage finance. However, because of the Eurozone crisis, it has become much harder to apply for a mortgage loan and even if you are that lucky one who have got the loan, only to find yourself later dipped and chained in the mortgage debt, unable to pay the mortgage arrears.

Hence, the only option left is renting.  Which is what a part of this report shows in its finding. It shows that private renting or rather renting in general has become the way of life for Britons. It shows an intense rise of private sector renting of 56% since 2004-2005.

Below is the chart/table by the Department for Communities and Local Government, helping figure out how Britons live in UK – house owning, mortgage finance or renting:

England's housing market
TYPE	Households	% 2003/04		Total 2003/04	% 2009/10	Total 2009/10	% change in totals
TENURE	owned outright	28.5		6,021	31.3	6,820	13.3
TENURE	buying with a mortgage	37.7		8,521	34.4	7,695	-9.7
TENURE	all owner occupiers	66.2		14,542	65.7	14,515	-0.2
TENURE	local authority	10.8	2,470	7.4	1,745	-29.3
TENURE	housing association	6.3		1,459	8.2	1,927	32.1
TENURE	all social renters	17.1		3,929	15.6	3,672	-6.5
TENURE	rented privately unfurnished	4.9		1,513	8.4	2,621	73.2
TENURE	rented privately furnished	1.4		636	2.0	725	13.9
TENURE	all private renters	6.3		2,148	10.5	3,346	55.8
AGE	16-24	1.7		720	2.1	826	14.8
AGE	25-34	12.3		3,331	11.9	3,185	-4.4
AGE	35-44	19.1		4,401	18.2	4,269	-3.0
AGE	45-64	31.9		6,955	34.3	7,688	10.5
AGE	65 and over	24.6		5,212	25.4	5,565	6.8
TYPE	couple, no dependent children	33.7		7,544	34.1	7,831	3.8
TYPE	couple with dependent children	19.8		4,484	19.4	4,516	0.7
TYPE	lone parent and dependent children	5.7		1,369	6.1	1,521	11.1
TYPE	other multi-person households	5.3		1,349	6.9	1,716	27.2
TYPE	one person	25.2		5,873	25.4	5,949	1.3
ECONOMIC STATUS	full time work	46.6		11,035	46.7	11,095	0.5
ECONOMIC STATUS	part-time work	6.6		1,537	7.2	1,692	10.1
ECONOMIC STATUS	retired	26.9		5,715	27.2	5,974	4.5
ECONOMIC STATUS	unemployed	1.3		331	2.9	756	128.3
ECONOMIC STATUS	other economically inactive	8.1		1,975	7.7	2,017	2.1
TOTAL	Total	89.6		20,619	91.8	21,533	4.4

Source: DCLG

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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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