Margaret Thatcher and the London rental market
We asked Rentonomy to give us an exclusive quick overview of how the rented sector in London has changed by Prime Ministers before and after the Iron Lady (we looked at house prices by Prime Minister at the end of last week).
“Like much of Margaret Thatcher’s legacy, her impact on the housing market will be vigorously debated,” says David Butler of Rentonomy. “However, we expect all will agree that the impact of the Housing Act 1988 was as profound as it was transformative, particularly to the private rented sector in London.
“The chart [see above] looks at the terms of each Prime Minister since 1963. We’ve looked at how the rented sector in London changed in size per year in office. Over the course of the Thatcher government, the sector did shrink on average. However, when viewed in the longer-term, it’s possible to see her term in office as the point where the sector stopped shrinking and began growing.”
At the beginning of the twentieth century more than three-quarters of the UK population lived in private rented accommodation with ‘Protected and Statutory’ tenancies which gave tenants considerable rights and protected them from eviction. The Housing Act of 1988 aimed to change the balance of power to attract landlords.
The results can be seen in Rentonomy’s chart below – the 1991 census shows the ratio of owner occupiers to social renters to private renters in London was 60:30:10 and by 2011 it was 50:25:25.
“The sector got an extra supply-boost following the housing market crash of 2008/9,” says David. “Many people active in the market were lumbered with properties that they were expecting to sell on, but had to let them out, thus becoming ‘accidental landlords’.
“It would seem that all this increase in supply should lead to lower rents for all, but in reality the general trend is the reverse. While the amount of rented stock has increased, demand has increased even more so because the relative scarcity of properties to buy, given the reluctance of the above landlords to sell, and large mortgage deposit requirements have made renting the only option for many.”
You can read more about detail this subject on the Rentonomy site.real estate, renting
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