The number of families with children living in the private rented sector in England has more than doubled over the past two decades as the number able to buy with a mortgage has fallen sharply.
New analysis from mortgage lender Perenna shows that since 2004 the number of households with children renting privately has risen by 121%, equivalent to 834,000 additional families.
There are now more than 1.5 million households with children in the rental sector, accounting for 32% of all private renters.
While renting has increased across the population, families have been affected disproportionately. Over the same period, the number of renters without children rose by 99%.
DEMOGRAPHIC CHANGES
Data from the Office for National Statistics shows the total number of households with children has grown by just 1% since 2004, compared with a 20% rise in households without children.
At the same time, the number of families able to buy with a mortgage has dropped significantly. ONS figures show households with children owning a home with a mortgage have fallen by 803,000 (20%), declining from 4 million to 3.2 million over the past 20 years.
Perenna says the shift reflects a prolonged affordability crisis combined with limited housing supply and reduced alternatives for families unable to buy.
Social housing options have also declined. The number of households with children in all forms of social housing has fallen by 2% since 2004, while those living in local authority housing have dropped by nearly a third (29%) since 2008, the earliest year comparable data is available.
AFFORDABILITY CRISIS
Colin Bell (main picture, inset), Co-founder and Chief Operating Officer at Perenna, says: “Our analysis paints a stark picture of the current UK housing market. We have been stuck in the grips of a mortgage affordability crisis for nearly two decades, compounded by a lack of suitable housing stock and a simultaneous lack of investment in alternative tenures.
“This reality is leaving hundreds of thousands of families unable to get onto the property ladder at all, exposed to ever rising rents and often, unsuitable properties, and we need to find a much more effective way to support them.”
INNOVATION NEEDED
He adds: “We need to see more innovation hit the mortgage mainstream to address this need. Affordability led low deposit mortgages and higher LTI lending are vital for helping them navigate higher house prices.
“Longer-term fixed rates with affordability based on the fixed rate will enable families to access more finance, giving them the ability not only to get on the ladder, but to stay on it in property that suits them as well as giving them fixed payment stability for longer.
“Taking action will create a nation of happy homeowners who can build equity and financial stability, and drive our economy forwards – not a group of renters for whom buying remains a pipedream.”
