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Rental is 'the' affordable housing market

Private rented housing is “the affordable housing market”, according to an influential housing report published today by Hometrack, the property consultants.

Speaking at the launch of ‘Can’t Buy, Can’t Supply’, director of research Richard Donnell said that “rental delivers important flexibility for the housing market”.

He said that more investment was needed to meet demand for new homes and that rents had risen by up to 20% already in some areas.

The report’s author, York University academic Prof Steve Wilcox, said the cost of renting was between 30 and 40 per cent cheaper than a 25 year mortgage, which did not include maintenance costs.

He also said that government guidance on first-time buyer statistics was “flawed”, because it did not take into account the breakdown of what kinds of people are buying homes and why (such as existing owners trading up).

Donnell added that “first time buyers make up just 12 per cent” of the market. He said that “press coverage was totally disproportionate to what’s happening on the ground” and that ministers needed to be more creative in finding solutions to the housing crisis.

Speaking on how to encourage greater rental development to meet growing demand, Wilcox added that “planning policy must change to re-assess what intermediate housing is; rental is still classed as ‘market’, which is incorrect”.

While Wilcox said that press reports had “over-inflated” the issues of repossessions, he said that “in some areas we would see an extra 25 per cent through credit cards” and other debt, as “repossession figures only look at primary mortgages, not other secured debt”.

He added that “policy is not focused on what we need” and that it “should be focused on getting people up, onto and then off the housing ladder”, directly mirroring calls from the BPF residential committee chairman, Rupert Dickinson.

There was also a warning that affordable housing will drop significantly as it is directly linked to private development.

Figures outlined today show 67 per cent of affordable housing is provided through development levies. But with major house builders not building new stock, the government will need to find new ways to deliver these homes.

Ian Fletcher, director for residential policy at the British Property Federation, said:

”Unrealistic demands on housing developments which the public needs achieve nothing. Affordability is determined by a person’s income, not by the type of property. There are many providers of professional rented accommodation who could benefit from the definition of ‘affordable housing’ being widened, and there are thousands looking for rental homes who would benefit as a result.”

For further information and interviews, please contact Andrew Teacher, media manager, on 020 7802 0113, or email atecher@bpf.org.uk.