Rents to soar further in “unsustainable” housing market
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by Gill Montia
Years of not building enough homes have led to rising rental and house prices in the UK, leaving millions of families struggling to pay for their accommodation, according to the National Housing Federation (NHF).
The result is an unsustainable housing market which could see millions more families relying on Government support to pay their rent.
In a new report, the NHF, which represents England’s housing associations, claims that the outlook is bleak for those who don’t already own their homes, with both private rental and house prices forecast to rise sharply from 2015.
Currently private rents are increasing at a faster rate than house prices, and the knock-on cost to the taxpayer is rising as a result.
The report reveals that 417,830 more working people (an 86% increase since 2009) are now reliant on housing benefit to help cover the rent on their home.
David Orr, chief executive of the NHF, comments: “We now have millions of families struggling to keep on top of their rents, priced out of the housing market and nearly 10,000 more working families every month are now reliant on housing benefit to help pay their private rent.”
He adds: “These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak.”
Other key findings from the Home Truths 2012 report include:
The cost of privately renting a home has risen by 37% in the past five years, and is set to soar a further 35% over the next six years.
Private rents are likely to be fairly stable through 2013 but could see steep increases from 2015 to 2018 of around 6% a year as interest rates rise and house prices increase.
The weakness of the economy will see modest falls in house prices into 2013, but demand conditions will support renewed house price growth of 5% to 6% a year across England from 2015 to 2017.
In 2011 390,000 new families were formed, but only 111,250 new homes were built.
House building starts will recover only gradually, from 100,000 homes this year to 140,000 in 2014, but increases will flatten out from around 2016 / 2017.
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