It is claimed that one in five people are to be a private tenant in two years

Monthly rents will reach an average of £800 in England and Wales in two years’ time, while one in five people will be living in private rented accommodation.

The claims came from Lucy Jones, operations director at LSL, speaking yesterday at a Council of Mortgage Lenders conference.

She said the increase would equal a 21% rise since 2010.

She said: “While economic expectations have changed, and even as rents in many areas have risen rapidly, the private rented sector has actually been surprisingly stable.

“Meanwhile, the purchase market has resembled a broken rollercoaster.  

“First-time buyers have seen a boost from new government schemes this year, but the ability to raise any deposit at all has been severely reduced by the recession. As house prices accelerate, this long-term trend towards renting will continue.”

She went on: “Whatever the regulatory outlook, the economic fundamentals will remain the same. Landlords will be critical in providing more homes for million of people who are no longer able to buy. Not just rents will rise.

“Gross yields are set to increase, too, and that should encourage investment from landlords – but they will need finance to continue to keep pace with such demand.

“More finance can allow more homes, and that’s slowly happening. Buy-to-let advances are growing gradually, at what should prove a sustainable rate. And long may that continue. This year, buy-to-let looks set to return to the same proportion of mortgage lending as it was in 2007.

“The private rented sector is set to flourish in the recovery, if anything more vigorously than its performance in the recession.”

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County prices on the rise

Yorkshire’s property market has encountered a clear rise in activity over the last month, according to statistics from the region’s largest independent estate agent Dacre, Son & Hartley and backed by data from Nationwide that reveals that prices are gradually rising as the market gains momentum.

The latest statistics from Nationwide show property sales are roughly 5% higher during the first five months of 2013 in comparison with the average monthly levels in 2012. According to the mortgage lender this has assisted in pushing annual price growth to 1.1% with prices increasing by 0.4% in May alone, which means the average house in the UK now costs £167,912.

Patrick McCutcheon FNAEA, Head of Dacres Residential said: “Economic news is generally more confident, with the UK returning to growth in the first quarter of 2013 and this is having a positive effect on the housing market. Even the weather improving plays a part in boosting sentiment amongst potential homebuyers.

“In Yorkshire the sub £500,000 sector has seen the greatest increase in activity and this is steadily filtering up the market. Mortgage finance remains cheap and the availability of credit is improving with initiatives such as the ‘Funding for Lending Scheme’, which allows banks to borrow money at discounted rates from the Bank of England before lending it to customers, having a positive impact.”

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More retirement homes to be built

A leading housebuilder has thought of an inventive answer to the UK’s housing shortage, by moving older people into retirement homes and allowing younger people to purchase their homes.

McCarthy & Stone, Britain’s leading builder of retirement apartments, has alerted that a city the size of Manchester (approximately 500,000 people) needs to be built every two years for the next 20 years to house the UK’s ageing population.

A super sized building programme to meet this shortage would not noyl release up to 3,750,000 existing and much-needed family-sized homes to stop the Uk’s family housing deficit but would also maintain 250,000 new construction jobs a year to 2033 and provide a substantial boost to the economy.

As underlined in the March 2013 House of Lords’ Ready for Ageing? report to which McCarthy and Stone gave evidence, the UK’s specialist housing provision trails sadly behind other developed countries with just 2% of housing stock built as retirement housing in comparison with 17% in the US and 13% on New Zealand and Australia.

But 17% of people (9.2 million) in the UK at present are over the age of 65 and by 2033 it is predicted that over 13 million people will be over 65.

A 100% rise in those aged over 85 is expected by 2030.

Nevertheless, just 1,600 specialist retirement homes were built for ownership in 2012.

That figure is substantially below demand for this type of housing.

Steve Secker, regional managing director for McCarthy & Stone, said: “Releasing more homes for families will benefit the entire housing chain and lead to more jobs.”