Rentier nation

For all the political rhetoric about home ownership, official figures released today confirm that England continues to become a nation of private tenants.

The dwelling stock estimates published by the DCLG show that 137,000 homes were added in the year to March 2014. Of these, an astonishing 90 per cent were private rented (123,000). The owner-occupied stock increased by 24,000 but the social and affordable stock fell by 1,000 and the other public sector stock by 9,000. These figures reflect net changes in the stock, so they include existing homes changing tenure as well as new homes.

More broadly, they provide a last chance before the election to judge the coalition’s record in its first four years in office. Between March 2010 and March 2014, a total of 533,000 homes were added to the stock. Within that, owner-occupation fell from 65% to 63%. Private rented rose from 17% to 20%. And the proportion of homes owned by housing associations and local authorities fell from 18% to 17%.

Here’s a graph showing the change in the number of homes in each tenure between 2010 and 2014:

Not much of a record is it?

The total number of homes added to the stock in four years is enough to meet just over two years of demand at 245,000 a year. That’s one big reason why house prices remain high and so many of us have been forced to become private tenants.

The coalition may at least be able to claim that it has presided over an increase in social and affordable housing, unlike the last Labour government. However, that overall total conceals a shift from social to affordable as new homes are built and existing ones converted to rents at up to 80 per cent of market levels. The number of social rented homes fell.

One more piece of good news for the coalition is that the trend from owning to renting did at least slow down a little in 2014. The 24,000 rise in owner-occupied homes in 2014 was the first since the financial crisis and the 123,000 increase in private rented homes was the lowest in 10 years.

England is not the only UK nation to see a shift from ownership to private renting since 2010 but the trend is much more pronounced than elsewhere. It’s not much to show for the billions of pounds poured into Help to Buy and other schemes to support home ownership.

Despite all that government support, the pressure of high house prices, rising buy-to-let investment, tighter mortgage lending rules and increasingly insecure forms of employment are pushing harder in the opposite direction.

Originally posted on Inside Edge 2, my blog for Inside Housing