A Generation Unable to Fly the Nest – the Letting Boom in the Busted Marketplace

Recent news has told us that half of those aged 20 to 24 still live with their parents, unable to raise the funds to get on the housing ladder or even to rent. In recent weeks it has also been reported that the residential letting market in the UK is now worth £32billion and that landlords are “earning” vast annual sums from private rentals. These are two sides of the same coin.

Those who do manage to scrape rent together are increasingly forced to stay forever renting because they simply cannot afford to save for a deposit, pinched as they are between falling wages and rising prices – and a great many people can no longer earn enough money to pay rent without claiming government assistance through benefits. Thus, in this age of cuts and austerity, a large proportion of the rental market quietly transfers public money into private pockets. This is a direct result of the selling-off of our nation’s social housing stock over the last three decades, much of which fell into the hands of ‘housing associations’ and other private landlords. Vast sums of public money are now poured into these private coffers, where once it fed back to our councils and could be used to fund local public services.

The fortunes to be made from renting have driven-up demand for properties and this has, in turn, contributed to the spiralling prices now seen across our out-of-control housing market. Those of us fortunate enough to already own our own homes may be among the last generation to do so, our children and grandchildren only dreaming of affording a deposit, destined never to join the property-owning classes except perhaps by inheriting a house – and nobody wants to be on that waiting list.

The aspirational dream of the Thatcher era has ended in homelessness, squats and families living in B&Bs. Never mind talk of building affordable housing – that just gets snapped up by those running the rapacious rental market, driving up average house prices even further – what we need is for the government to invest in a massive program of building new social housing: the economy of our country and the happiness, security and stability of its citizens are at stake.

About Fles

Early middle-aged (oh yes I am!), no longer long-haired but still speccy and decidedly still an increasingly opinionated git. I’m basically a believer in individualism, that everybody has their own perspective and inner-beauty. I try to find humour in every situation. I enjoy reading and writing poetry.
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1 Response to A Generation Unable to Fly the Nest – the Letting Boom in the Busted Marketplace

  1. It’s not specifically the result of selling off the social housing stock, its a result of the nation failing to build enough new dwellings.

    The increase in demand for dwellings is approximately 200k new units per annum, even when times were good the nation was building <180K new units a year, i.e. we had a 10% shortfall on the increase in supply vs the increase of demand. This was due to several factors but the major one was planning policy, much of which was a hangover from previous administrations (so not party specific) and it needed reforming, that has now been done to an extent but there is still a huge culture of nimbyism. Whether the ownership of the dwellings is in public or private hands pales into insignificance to the non existence of those dwellings.

    During the depths of the recession (or depression?) there is no way the nation was building 100K let alone the 200K new units needed to keep up with demand, that is why rents and prices have gone up. The price of both sale and rental is a balance of supply, demand and affordability so if we increase the supply side the problem will melt away. It won't need the housing associations to own everything, because the private landlords won't be able to charge through the nose and ignore problems; if there is a greater supply tenants will have the ability to pick and choose.

    There are too many people who are not really professional landlords, they just rent out a house and don't give a damn what condition it is in and really own a property as an appreciating asset with a "caretaker" tenant paying rent. They get away with it because of the lack of choice for tenants. If there were a larger housing stock, buy to let wouldn't be as attractive as prices would be more stable so their capital growth wouldn't happen. Instead it would favour the professional landlord who is in it for the income yields and wants tenants who stay years rather than months.

    What we need is for the public to embrace new developments on the edge of their town or village along with the creation of new towns in rural areas instead of an overwhelming desire to stand in the way of progress. The people who shout about their son or daughter not being able to afford a house in the village the family has lived for generations are all too often the people objecting to new houses being built and spoiling their view!

    Of course the last time the nation had the money for a government to build housing was in the Blair/Brown administration and they should have because we already had the compound effects of several years of under-production to catch up on but they were too giddy with an economy based on dodgy lending to want to rock the apple cart.

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