A few months ago the Building and Social Housing Foundation argued that one in five households could be living in the private rented sector by 2020, if current trends continue. Last week the estate agents Savills suggested that we could reach that situation by 2016. Is the housing market trend towards private renting speeding up? More probably, we’re not quite sure exactly what’s happening, nor how fast. But it is fairly clear that there’s plenty of change in the housing market. We know that something like a million additional properties have entered the private rented sector since 2005.

We may be witnessing a structural reorientation of the housing market away from home ownership. Or we may be witnessing temporary turmoil as a consequence of the global finance crisis. It is more likely that the future trajectory of the housing market is yet to be determined. The negative equity of the early 1990s led to the rise of the “slump landlord”- owners who wouldn’t or couldn’t sell who rented out their property while themselves renting elsewhere – but that phenomenon largely disappeared as house prices moved upward again. So what we are witnessing now cannot yet be assumed to represent structural change. What policy makers do over the next few months will shape which future is realised. The only thing that everyone is agreed upon is that increasing housing supply is a good thing. Beyond that, there is room for debate. Continue Reading →