More people rent homes privately

To let signsMore households are renting their homes privately in England than living in social housing for the first time since the 1960s, Government figures show.

Meanwhile, the proportion of households who own their home has slumped to its lowest level in 25 years as the private rental sector has boomed, the English Housing Survey 2011-12 showed.

The figures reflect the strong levels of demand in the rental sector as many people have found themselves locked out of home ownership in the tough economy.

Some 17.4% or 3.84 million households were living in the private rental sector last year, compared with 17.3% or 3.80 million renting from councils or housing associations. The vast majority of households are home owners, making up 14.39 million, but at 65.3% of households this is the lowest proportion recorded since 1987.

The survey also found an increase in the proportion of households within the private rental sector which are classed as overcrowded, meaning that the number of bedrooms is not enough to avoid some "undesirable sharing".

The proportion of overcrowded households in the private rental sector has doubled from 3% in the mid-1990s to 6% in 2011-12. Around three-fifths of private renters, equating to 2.2 million households, said that they expected to buy a property at some point in the future - but 45% thought it would be five years or more before they did so.

Campbell Robb, chief executive of charity Shelter, said the figures are "bad news for anyone struggling to find a decent and affordable home". He said: "As saving for a home of their own becomes increasingly out of reach, many have no choice but to live in rented homes for years on end. Today's figures take the growth of 'generation rent' to a whole new level. This should be the wake-up call that the Government needs to make renting fit for purpose."

In 1961, there were 3.2 million households living in social housing, while 4.7 million lived in the private rental sector. But a decade later this had been reversed and by 1971 there were 4.6 million families living in social housing compared with 3.2 million who were privately renting.

Shelter recently produced a report which argued that the private rental sector has outgrown its role in primarily providing accommodation for students and young professionals. The charity said that families have become stuck in the "rent trap" as rents have soared due to strong demand, which has left tenants with little cash to be able to save for a mortgage deposit.

A spokesman for the Department for Communities and Local Government said: "The revamped Right to Buy is also providing a boost to aspiring homeowners, offering 2.5 million social tenants the opportunity to buy their home with discounts of up to £75,000. These measures have resulted in the highest number of first-time buyers since 2007 and affordability for first-time buyers is the best it has been since 2003."