they can then easily downsize to get a one bedroom flat in Stratford. If they then get a better job then they’ll move on to Chelsea.
“What lenders need to be careful of is that people might lose the appetite to buy. You have reluctant renters building up the proportion of renters but you also have young professionals who strive for far more flexibility.” John Charcol’s senior technical
director Ray Boulger agrees. “The trend away from owner occupation towards the private sector rental market started before the credit crunch, driven by demographics.
“During this time the share of the social subsidised rental sector has
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remained static. The proportion of social renting and private sector renting is now roughly equal but it is clear private sector rentals will soon exceed social renting.” Heron, Fitzgerald and Boulger aren’t the only ones to express this observation. The National Housing Federation commissioned a market analysis and forecast by Oxford Economics. It found that home ownership in England is expected to fall to 64% of all households by 2021 from 67% today. In 2001 the proportion of people living in owner-occupied homes was 72.5%. We are today witnessing a fundamental transformation in the UK property market.
TO BUY OR NOT TO BUY With so many shifting towards renting the first reaction is that financially there is a better deal there, but is it really? The cost of renting has been increasing at a steady but alarmingly consistent pace. Over the past 12 months the cost of renting was reported to be at around 4% higher than the previous year for every month, figures from LSL Property Services reveal.
Houses on the other hand have been MORTGAGE INTRODUCER MARCH 2012 29
MORTGAGE INTRODUCER APRIL 2012
a broadly flat picture with little changes in prices. Using its own house price index, mortgage payments and rental data, Halifax said that buying a home in the UK is, on average, over £100 a month cheaper than renting.
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