Renters are paying more than double what home owners pay in mortgage interest, underlying the need for more rental stock, Savills claims. Using a rang
Renters are paying more than double what home owners pay in mortgage interest, underlying the need for more rental stock, Savills claims.
Using a range of data from UK Finance and the ONS, the agent has worked out that in the year to June, renters paid more than £54bn in rent to private landlords, compared with £26.5bn in mortgage interest payments for home owners.
The total private rental bill in Great Britain has risen by £14bn over the past five years, up 35%, while the number of homes in the rental market has increased by just 21%.
In comparison, the amount of mortgage interest owed has fallen by £6.4bn, largely due to low interest rates, the agent said.
Of course, some of the increase will be due to there being more people renting, rather than purely the amount paid going up.
For example, private renters in England made up 19% of housing tenure in 2015, increasing to 19.9% in 2016, while the proportion of owner-occupiers fell from 63.6% to 62.9%.
Similarly, in Scotland, the proportion of rental households increased from 14% to 15% between 2015 and 2016, while the percentage of those owning a property has remained flat.
Lucian Cook, head of residential research at Savills, 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. Savills’ 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.
“This is real progress, but we need policy that encourages the rapid expansion of build-to-rent.”