Around half of all babies born in Britain – approximately 365,000 a year – are now born into rented accommodation, new analysis from Royal London has revealed, with more half of those – around 200,000 a year – born into insecure private rented accommodation.
For the first time in living memory, a child is at least as likely to be born into a rented home as a home owned by its parents, up from around one in three babies in 2003/04.
The analysis, using data from the Family Resources Survey, suggests that parents are renting from private landlords for longer, with worrying financial, practical and emotional implications. There are now over 1.5 million families in England with dependent children living in private rented accommodation.
Across the United Kingdom as a whole, the number of families with dependent children living in private rented accommodation has risen by 94 per cent in the last decade, from 940,000 in 2006/07 to 1.8 million in 2016/17. The analysis, published as part of Royal London’s latest policy paper: “The Parent Rent Trap”, also highlighted the 20 per cent premium paid by private renters, compared with those repaying a mortgage (a mean of £844 a month compared with £678 a month in average mortgage repayments) and the impact of this on their ability to save up for a deposit.
The report has suggested that renting itself is becoming unaffordable, leaving renting families at particular risk of financial difficulty and even less able to save up a deposit. According to Royal London, the growth of the private rented sector, coupled with the rising cost of renting, has put home ownership further out of reach of people aged 25 to 34. The age at which most couples have their first child is 29 (mother) and 33 (father). The average age of a first-time buyer is 34, up from 26 in 1997, according to the English Housing Survey.
That said the figures regarding the number of first-time buyer mortgages remain encouraging. The starting point for a lot of people is understanding how much it is possible for them to borrow. Some are pleasantly surprised. Others are grateful to understand the gap between how much they have and how much they need. We see an increasing number of clients coming back to us 12-15 months after they first made contact.
It got lost slightly in the Brexit coverage but Mr Hammond delivered the Spring Statement on 13 March. In it he made a further commitment to previous statements regarding the ambition of building 300,000 affordable homes per annum. As a mortgage adviser that helps first time buyers in particular, this is another welcomed indication of intent
The government is also looking to improve the housing market by building more homes in the right places unlocking productivity growth and making housing more affordable. At the Autumn Budget, the government set out a package of new policies to raise housing supply by the end of this Parliament to reach 300,000 a year on average. The Spring Statement set out further steps to deliver this ambition. Amongst these, through the Affordable Homes Guarantee Scheme, the government will guarantee up to £3 billion of borrowing by housing associations in England to support delivery of around 30,000 affordable homes.
If you are a first time buyer and have any questions, like how much will I be able to borrow. Or perhaps you are looking for mortgage products, call us.
0330 043 0013