The ‘affordability’ of housing is one of the most prominent domestic public policy issues of the day, and for good reason. The housing that people are in is an important determinant of their well-being, and it is something on which people – especially those on lower incomes – typically spend a substantial fraction of their income. Changes in the price of obtaining a given standard of housing can therefore significantly affect living standards. This report from the Institute for Fiscal Studies,documents changes in housing tenure and analyses changes in the cost of renting.
The overall proportion of the population of Great Britain who live in rented accommodation has risen to 35%, up from 29% in the mid 1990s. But this growth has been entirely in the private rather than social sector and heavily concentrated among the young. Just 12% of 25- to 34-year-olds rented privately in the mid 1990s. This has since trebled to 37%.
The shift towards private renting largely reflects falls in owner-occupation towards the top and (especially) the middle of the income distribution; and falls in social renting towards the bottom of the distribution.