Your retirement plans will face numerous hurdles as a result of 50 years of change.
PENSION planning for retirees is about to get even more difficult, as decades of shifting rental practices are about to hammer an already suffering economy. The Office for National Statistics (ONS) released data on the housing market’s evolution over the previous 50 years or so today.
For many people, pension planning is a daunting idea, but changing rental and mortgage dynamics are going to make retirement even more challenging. Today, the ONS issued its “50 years of change: 1961 compared to 2011” report, and Hargreaves Lansdown (HL) decoded the findings.
“Generation rent is nothing new,” HL said, “but this time it’s more difficult.”
According to the research, only 42% of households had their own home in 1961, with fewer than 10% in some sections of London.
By 2011, 64 percent of residents owned their own property, with Shoreditch having the lowest rate of ownership at 16 percent.
In 1961, 28 percent of households were privately rented, while 24 percent were rented from a council or New Town Corporation, according to the comparison (homes run by these corporations were later handed to councils).
Only 9% were rented from the local government in 2011, while 15% were rented privately.
Even while the rates aren’t drastically different, today’s renters have it far tougher than their 1960s counterparts, according to Sarah Coles, a personal finance specialist at Hargreaves Lansdown.
“Generation rent isn’t a novel concept; in fact, it’s the norm. “A smaller percentage of individuals owned their own home in 1961 than they do now, and fewer than one in four people did in WWI,” she said.
“However, changes since the 1960s imply that today’s generation rent has it more tougher than their predecessors in the 1960s.
“There has been a progressive shift from renting from the public sector to renting from private landlords over this time.
“In 1961, the public and private rental sectors were nearly equal, but in 2011, the private rental sector was significantly larger (15 percent compared to 9 percent rented from a local authority).
“Because private rent is more expensive, renters currently spend on average 32 percent of their income on rent.”
Ms Coles went on to investigate the ramifications of this. “Brinkwire News in Condensed Form.”