House prices still rising but it’s renters we should be concerned about

There’s a message for Labour in Zoopla’s latest house price index, just not one immediately obvious from the headline numbers.

They continue to tell a story that has been running since the market’s post-lockdown recovery. House prices are booming with scant sign of a let-up.

Since March 2020, the UK average has risen by £29,000, or 13 per cent. Prices rose 8.3 per cent in just the last year.

This is having a brutal impact on those trying to get their feet onto the property ladder, which these days looks less like a ladder and more like Mount Everest’s base camp.

First-time buyers are now spending an average of £225,000, which is an increase of £27,000 compared to just two years ago. The quarter-million mark looms large.

Zoopla says that all this translates into an additional £4,000 on a deposit. Buyers also need an additional £5,000 in annual household earnings or income in order to secure a mortgage, which equates to £417 per month.

These costs are vastly outstripping the rise in average earnings (£2,704 over two years). Rapidly rising inflation means those earnings aren’t really rising. To the contrary.

While the company notes signs of an improvement in supply – which has been constrained – in some areas, and even a few “supply hotspots”, demand remains robust and continues to outstrip it.

So the screw tightens on the young. In previous eras they might have been out on the streets smashing windows as a result of this, but I suppose that the price of that has gone up a lot too. It’s hard to raise the cash to cover a fine when you’re deciding whether to heat or eat.

The government wants to encourage property ownership and no wonder. Homeowners are, as a group, more likely to vote Tory than are renters.

The trouble is its efforts to date – such as subsidising banks to offer 95 per cent mortgages – have only served to exacerbate the price problem by piping heat into the bottom end of the market. This would be more of a problem for it if a few more people noticed that ministers had been shooting themselves in the foot.

But they mostly have other problems. Many of them will never escape “Generation Rent”. Doing that is increasingly a function of parental income.

Those without a branch of the Bank of Mum & Dad open to them are, unfortunately for them, stuck in a horrible bind, pouring money into their landlords’ coffers and living at the whim of their retirement plans (which is when they may feel inclined to sell to release capital).

Regulation of private landlords is patchy and inefficient. Enforcement is weak, where it even exists. Good luck getting that guttering fixed if you live in the wrong postcode.

Being stuck in this sector, which has doubled in size past 10 years, and now houses 11 million people according to the House of Commons Public Accounts Committee (PAC), can be as grim as an Eastenders marathon on UK Gold, or Gold, or whatever they call it now.

Renters face challenges every bit as daunting as do buyers but without the consolation that the high costs they incur are at least going towards an asset. Their plight is deserving of more attention.

True, a white paper has been promised, following on from the Social Housing Regulation Bill. Social housing has itself become more business-like, with big institutional investors increasingly involved in the sector.

Change is sorely needed. A recent report by the PAC concluded that it is “too difficult for renters to realise their legal right to a safe and secure home”. It said that local authorities lack the capacity and the capability to protect renters, highlighting the all too common problem of the “postcode lottery”.

The problem with the white paper is, said the committee, that “the Department for Levelling Up, Housing and Communities lacks good enough data to understand the nature and extent of problems renters face”.

With prices increasingly closing off the option of homeownership, there is a vast corps of people in need of better than that.

Labour should take note. This justifiably aggrieved constituency may be minded to turn out if the party could move itself to come up with some decent ideas.