Almost one in six homes now rent privately

Nigel Terrington, chief executive of Paragon, the buy-to-let specialist, welcomes new Government data which vindicates Paragon's long held view that private renting is a growing and vital component of the UK housing market.

The Communities and Local Government's English Housing Report, published yesterday, shows that the number of households renting privately has risen by one million since 2005-06, from 2.4 million to 3.4 million in 2009-10. The PRS now accounts for 15.6% of all households in England, up from 14.2% in 2008-09 and 11.7% in 2005-06.

Other key findings from the CLG's report include:

There has been a decrease in the number of owner-occupied households from a peak of 14.8 million in 2005-06 to 14.5 million in 2009-10. The proportion of households in owner-occupation has been in decline since 2003, falling from 70.9% to 67.4% during the period

The proportion of social renting households is also in decline, falling from 19.5% in 2001 to 17.0% in 2009-10

Overall, social sector homes were in better condition than private sector homes. In percentage terms, the number of non-decent homes in the private rented sector has fallen from 46.8% in 2006 to 40.8%

60% of all private rented households are living in decent homes, up from 56% in 2008, whilst the energy efficiency of homes in the private rented sector has improved more over the period than the owner occupied sector

Couples with no dependent children are the most common type of household in the PRS (26%), with one person households under 60 being the second largest household type at 23%

Lone parent households are more common in the private rented sector;

12% of private renters compared with 3% of owner occupiers

Half of all private renters are aged under 35 with half a million (15%) aged16-24 and 1.2 million (35%) aged 25 to 34

The PRS encompasses a wide range of economic status - 60% of households are in full-time employment, 9% in part-time work, 7% are unemployed, 8% are retired and 11% are classed as ‘other inactive'

24% of private renters receive housing benefit compared with 62% of social renters

There are 3.4 million properties in the PRS, 60% of which are located in suburban residential areas compared with just 4% in the city centre

Nigel Terrington, Paragon, says: "The CLG's figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector's importance to UK housing continues to grow as increasing numbers of people opting to rent privately rather than step on the housing ladder.

"Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline.

"With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2015, it is crucial that adequate levels of buy-tolet mortgage finance are available to enable landlords to expand the number of properties in the PRS."