The housing market is so saturated that even when the economy is booming, a good chunk of the population remains in the market.
A recent study by consultancy PwC showed that, on average, households spend a third more on rent than on other costs of living.
This is despite the fact that housing is becoming more affordable.
For a start, the cost of living is being squeezed.
The average rent for a one-bedroom flat in London has gone up from £1,700 in 2011 to £2,500 in 2019, according to the Office for National Statistics (ONS).
The average monthly rent in the UK is now £1.86, according the latest ONS figures.
That means households are now spending less on rent and more on utilities, such as a water bill and gas.
In a market where the housing sector is becoming less profitable, the rent hike may not have much impact on the overall economy.
“While there are definitely signs of housing affordability increasing, the market has still been saturated for quite some time and the current housing market remains quite different from the housing market of a decade ago,” said Gabor Maté, senior economist at research firm ING.
It’s also not as if rents have been soaring.
The proportion of people living in rented accommodation fell from 6.4% in 2000 to 4.6% in 2016, according a report from real estate consultancy CBRE.
Yet even with a fall in the proportion of households renting, the price of rent is still rising.
According to the latest figures from CBRE, the average rent per square metre in London rose by 5.1% from 2011 to 2016.
With prices rising, the proportion in the housing supply is rising.
That is in part because the economy has been booming, which has driven up rents.
While rents are increasing, households are spending more on other living costs.
A recent survey by the Resolution Foundation found that the proportion living in a family home is still higher than the proportion renting, with 40% of households in that situation.
Even so, the majority of households now live in one-bed flats, and the share of people renting is lower than in years past.
The government has made some moves to boost the affordability of the housing stock.
It introduced the first National Housing Supply Plan in 2012, which aimed to build a housing stock to meet the demands of a growing workforce.
But it has not gone far enough, according of economists.
When you look at how many homes were built per year in the 1990s, they were actually not enough, said economist David Gillett of University College London.
And while the number of people in rental accommodation is down, the percentage of people owning a home is higher.
As the economy slows down, and rents increase, it is unlikely that housing will be as affordable for the general population, according Maté.
If we are serious about helping the economy and the economy’s recovery, the government needs to look at building more affordable housing for people to live in,” he said.
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