25th
Oct 2017
Rents taken in by private landlords from tenants add up to twice the amount that home owners are paying banks in mortgage interest according to new research.
The survey from a national estate agent shows that from July 2016 up and until the end of June this year, private tenants throughout the country paid approximately £54billion in rent to their landlords as demand far outweighs supply.
The total amount of rent has reached an all time high and for the first time ever it is twice as much as the £26.5billion in mortgage interest payments being paid by homeowners whilst currently enjoying cheap mortgages and low interest rates.
Due to the low numbers of available 'homes' in certain areas of the country, the total amount of private rents has surged upwards by £14 billion since 2012 and whilst in direct contrast, mainly due low interest rates as well as older homeowners paying their mortgages off, the amount of mortgage interest being paid, has fallen by £4.6 billion.
In 2012 the difference between total amounts paid in rent and the mortgage interest paid by homeowners was just £7.4billion, whereas now it is a whopping £28 billion.
London is one the major reasons of the increase in total rents being paid across the country as prohibitive house prices are stopping younger generations from entering the housing market which, of course, increases demand in private rental properties.
Head of residential research for the estate agents, Lucien Cook, said: “It is widely accepted that the solution to the affordability crisis in home ownership is to build many more homes.
“The same is true in the private rented sector. Our analysis for the British Property Federation shows that there are now almost 100,000 build to rent homes under construction or in planning across the UK, up from 48,000 last year.”
He summed up: “This is real progress, but we need policy that encourages the rapid expansion of build to rent."
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