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MS Leader: Come clean on housing

Is the future for the UK housing market renting? That’s been the conclusion of a number of recent economic studies into property ownership over the next decade and in Mortgage Strategy’s cover feature this week on page 20, we take an in-depth look into where the market is heading.

For mortgage brokers, whether the market veers towards property ownership or there is a boom in the number of landlords providing rental accommodation, it should be a win-win one way or the other.

Five years of hell since the credit crunch first hit has meant those brokerages still around have ensured their businesses are now adaptable to the changing whims of the market.

But irrespective of how successful your business might be, as UK citizens we all need to live in a society in which the majority of people feel happy and able to get on in life. Will that be the case if only the wealthy are deemed able to get a mortgage and the rest have to rent?

There is nothing wrong with renting per se – far from it. But in the countries where renting is prevalent there are systems and controls in place to ensure rents are affordable and that tenants have security of tenure when they retire.

No such controls are in place in the UK. LSL Property Services’ May buy-to-let index which showed that over the month London rents went up 0.6%, hitting a record high of £1,038 a calendar month. Year-on-year they have gone up 2.3%, bringing them dangerously close to the current inflation level of 2.8%.

The government must have an honest conversation with the public about the housing crisis in this country and what it will mean for the property owning ambitions of future generations.

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  • Jo 26th June 2012 at 11:05 am

    Landlords are slack-jawed at how much money they can wring from people’s pockets. And no wonder. As long as the UK remains a stable democracy, people will flock here meaning this (relatively) small island will be a boon for property developers. At some point though the bubble will burst. The irony being that any nation prone to overcrowding becomes a more unpredictable place to live. Sophisticated, rational and liberal people of all colours will simply up sticks and leave. Already people of my generation (mid-30s) are thinking of getting out, particularly in London where it’s saturated. A better quality of life, a slower pace and more affordable living are all attractive options which currently are being eroded from the UK’s crazy costs of living. Should that happen, will areas like London end up like Ireland where properties are going begging? Strange to think that that could happen but it could. Landlords’ palms are itching for money but long-term they could end up shooting themselves in the foot.