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Housing in England: Overview

Wednesday 18 January 2017

The National Audit Office has released their findings from Housing in England:overview which claim that house building has not kept pace with need, a problem that is particularly prevalent in London.

The report also finds that:

Whilst there has been an increase in number of privately rented homes the number of socially rented homes has declined. Perhaps even more worrying is that prices for renting social accommodation has risen faster than wages. 

The total number of homes in England stood at 23.5 million in 2015, with the government set to increase this figure by a million by 2020.

Of these 23.5 million 62% of these homes are owner-occupied, 20% are privately rented and 17 are socially rented. 

In 2015, there were almost 5 million private rented homes, up from 2 million in 1981. In contrast, the number of local authority and housing association homes for rent has fallen, from 5.5 million in 1981 to 4 million in 2015.

Around a third of homes in the private rented sector are 'non-decent', a standard set by the government in 2001, compared with 14% in the social rented sector.

Affordability

Since 2006, the cost of private rented accommodation has broadly followed changes in earnings across England. The opposite has been the case in London, where private rents rose by 32% and average earnings increased by 16%,

Social housing rents have increased faster than earnings since 2001-02. Since 2011, the government has allowed local authority and housing association landlords to set rents at affordable levels, which it defines as up to 80% of local market rates. In 2014-15, new tenants paying affordable rents in London typically paid 60% more than new tenants paying traditional social rents.

Houses have become more affordable for existing homeowners, with the proportion of owner-occupiers who spend at least a quarter of their disposable income on housing falling from 40% to 19% of people with a mortgage. By contrast, housing has become less affordable for first-time buyers, and social housing rents have been increasing faster than earnings since 2001-2.

The amount that first-time buyers have to borrow to buy their first home has risen from 2.3 times average income in 2000 to 3.2 times income in 2014.

Homelessness has also increased over the past five years. At the end of March 2016, 71,500 homeless households in England were in temporary accommodation, up from around 48,000 in 2010-11.

Amyas Morse, head of the National Audit Office said:
“The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country.The government has responded to this by putting in place a range of policies to increase housing supply and home ownership. Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of housebuilding.”

The government's ambition is to deliver a million new homes over the next five
years, and increase home ownership via a variety of measures. The government will also publish a Housing white paper setting out a package of reforms to increase housing supply and halt the decline in housing affordability in early 2017.