One in Five Homes Are Now Buy to Lets, Says Government
Buy-to-let has mushroomed from 10% of homes in the 1990s to grab a 20% share in the English Housing Survey from the government’s Office of National Statistics.
Essentially, the report reveals the number of buy-to-let homes has doubled since 2003.
The figures for 2015-16 show that 4.5 million homes are privately rented, outstripping social housing, which has a 17% slice of all homes – which adds up to 3.9 million households.
During the same time, home ownership has declined.
At its peak in 2003, private home ownership accounted for 71% of all homes but has rapidly dropped to 22.8 million households and 63% of the market since then.
Meanwhile the number of families privately renting as climbed by 950,000 over the past decade, highlighting both a shift away from families buying their properties and a decline of 123,000 in the number renting social housing.
Buy-to-let households with children have increased from 30% (1.35 million) to 36% (1.62 million).
Other reports show private renting is the most expensive way to pay for a home.
Buy to let tenants spend an average of 35% of their monthly income on rents, compared to 28% renting social housing and 18% for homeowners with mortgages.
Overcrowding is also an aspect of renting the government wants to investigate.
Tenants report that 7% of social housing and 6% of buy-to-let homes are crowded, compared to 1% of privately owned properties.
The survey also shows that in 2015-16, the level of households buying with a mortgage fell to 29% - the rate peaked at 43% in the 1990s – and buy-to-let has outstripped purchasing a home in London, but private ownership remains the favourite option for the rest of the country.
Interestingly, almost 64% of private renters have remained on their property for more than three years. This shows that despite there being no minimum term required in law, the reality is that the majority of private renters stay for a good number of years.
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Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.