Real winners of UK housing market are the private landlords
Value of landlords' properties has soared despite financial crisis
February 5, 2013
A new report by estate agents Savills has shown that the value of private landlords’ stock has jumped 18% since the recession began. The report, based on recently released census data indicates that while the value of homes in other tenure types has fallen landlords have seen handsome returns on their investments. Over the last five years there has been a staggering 23% increase in the number of privately rented “units”.
The big losers in the housing market since the financial crisis have been homeowners. Things have been especially bad for people who own with a mortgage. Since 2007 the value of housing stock owned with a mortgage has tumbled 15%. However, first-time buyers are still locked out of the property ladder due to restricted credit, and sky-high rents which make raising a deposit a Herculean task. This has led to the lowest level of homeowner ship in the UK since 1988 as we documented in our report Death of a Dream.
The report also reveals the growing polarisation of the housing market. London and the South East now account for more than half of the country’s total private rented stock by value. This all demonstrates the worrying trend of more and more people being forced to rent for longer and longer. The private rented sector in this country is designed for transient workers and students, not for young families who are stuffed into inadequate accommodation.