5.8m households expected to rent privately by 2021
A new report has revealed that one in four UK households will be privately renting by the end of 2021.
At the moment around 5m households (21%) are currently living in privately rented accommodation, a quarter of whom are families with children.
As property prices continue to rise and wages stagnate, the annual report from estate agency Knight Frank forecasts the amount of those renting from private landlords is set to rise to 5.79m (24%) over the next five years.
Commissioning a YouGov survey of more than 10,000 tenants and 26 major investors, the report says that while at least three-quarters of UK renters are living in homes owned by private landlords, they will increasingly rent from large-scale corporate landlords such as City firms and property companies.
Couple that with the UK’s ‘pay-squeeze’, e.g.
- According to the Office for National Statistics wages have gone backwards since the 2008 recession;
– March 2008 the average weekly wage (excluding bonuses) was £473.
– The average basic weekly wage, adjusted for movements in prices, now stands at £458.
- Renting families, along with 50- to 64-year-old ‘soloists’ and couples and retired people over 65, tend to spend more than half their incomes on rent.
- Overall, 40% of renters pay more than 50% of their incomes on rent, the report found.
As the pay squeeze intensifies as wage growth falls further behind inflation, The Resolution Foundation (a thinktank that concentrates on the living standards of those on middle and low incomes) says the 2010s are on course to be the worst decade for wage growth since the one that included the Battle of Trafalgar in 1805.
Furthermore, considering that 5.5m working adults would not qualify for full housing benefit if they were to lose their job, more than doubling in a decade from around 2m at risk in 2003/04, it stands to reason that an increasing amount of private landlords and letting agents around the UK are now understanding the importance of obtaining a robust rent guarantee insurance.
Wise PRS landlords are now employing RGI as an effective strategy to reduce these risks.
(As a landlord) If you manage to house a non paying ‘professional’ tenant, before long your bills can be astronomical. Gain an understanding of the possible cost of this by adding up eight months rent minimum (it takes most Landlords at least 2 months to decide to evict), add court fees, bailiffs fees, your time, stress and energy. Don’t forget to add in the out of pocket expenses such as damage to the property, removed boilers, copper piping amongst a whole host of other damage that can be done. Environmental health visits and other activities can also delay the process by at least 12 months.
Having protection against this, in association with LandlordReferencing.co.uk’s unique Tenant History Reports, is one of the best methods of insuring against misfortune and potential bankruptcy.