If there’s one thing we at The Islington Company have seen change dramatically in the past 12 months; it is the rise in the amount of people turning to private rented properties. 

The extent to which Britain is turning to the private rented sector has been highlighted by the latest Census figures. They show that home ownership has declined to 64% among households in England and Wales, with numbers of private tenants sharply up.

According to the Census, 14.9m households owned – either outright or with a mortgage – their own homes last year, a decrease of 4% since 2001. By contrast, in 2011, 3,566,000 households were up in the private rented sector, up 9%% from the 1,889,000 ten years earlier. Private rented households now represent 15% of all households.

The fall in home ownership is entirely due to the decline in the number of households buying through a mortgage, as figures show the number of people owning their own homes outright has gone up.

Ben Thompson, managing director of Legal & General Mortgage Club, said:

“In 2007 we saw the onset of the credit crunch and in the years that have followed mortgage availability has fallen, and in particular underwriting criteria have tightened markedly. In short, for many, it is near impossible to secure a mortgage”.

He added: “It is the private rental sector that is absorbing this shift and providing alternative rental options. Private landlords are playing a very important role at the moment and this is likely to last for some time.”

As tens of thousands of UK households attempt to ride out the current financial storm, banks are asking homeowners to cut back on their outgoings and focus more on paying back the mortgage.

Although their advice comes in the wake of a 14 month boom in the number of mortgage approvals, banks have remained firm. As a lettings agency in London, we at The Islington Company are aware of the effects this will have on homeowners and landlords.

According to sources a number of institutions have asked more than 30,000 property owners to spend less on everyday luxuries from mobile phone bills to gym subscriptions and even nights out.

Rupert Murdoch may not be content either as some have even been told to get rid of their Sky TV packages to reduce debt. In fact, some banks are set to perform rigorous credit checks so that they can recognize clients who are a potential high risk.

The UK Asset Resolution has revealed that there are approximately 30,000 property owners from a number of banks who may be in the financial mire when it comes to repaying their mortgages.

Over the coming months, The UKAR intends to personally call around 2,000 customers on a weekly basis. This is to give people the opportunity to benefit from sound financial advice in case the interest rate level augments.

A senior official at The UKAR proclaimed that they will work in tandem with the customer to identify their spending and concentrate on helping people alleviate their financial worries and avoid getting into serious debt.

In essence, UKAR are asking people to ensure they have sufficient capital for their mortgage payments rather than spending it on luxury products including new cars and holidays.

Interest rates also play a key role as even a slight 1% growth could reduce a homeowner’s disposable income by more than £200 a year.

Yet in this Big Brother era, is there really a need to carry out further financial investigation despite owning a mortgage? The jury is well and truly out on this one.

Landlords in Central and North London are more confident about their property portfolios now than they have been at any time since the beginning of the year.

According to research by Paragon Mortgage, buy-to-let investors are not only revelling in high rents (more than one third had increased rents in the second quarter) but say mortgage finance for homes to let is far easier to obtain today.

Around 30 per cent of professional landlords say they feel more content about the buy-to-let market than in the first quarter of 2011.

When it comes to types of property, more landlords are catering for families or groups of professional sharers and choosing to buy houses rather than one-bedroom flats for single or couples occupancy to rent. In fact, more than half of those landlords surveyed said terraced homes were now their focus. Semi-detached homes were also popular to rent with 41 per cent of landlords said they were looking at these, compared to 28 per cent in the first quarter of the year.

At The Islington Company we have a large number of large terraced houses in locations we cover such as Angel, Islington, Highbury, Holloway, Dalston, Hackney, Clerkenwell, Arsenal, Caledonian Road, and King’s Cross.

Figures released by the Council of Mortgage Lenders (CML) last week showed the value of buy-to-let mortgages had increased from £148.8bn to £154.5bn between June 2010 and 2011. A total of 32,000 buy-to-let loans were approved between April and July this year.

In continuing with the positive vibes, 22 per cent of landlords said they found buy-to-let finance more amenable and predicted they would have invested in more properties by the end of the year. The average number of properties landlords held in the Paragon survey was 12.

Analysts are predicting that mortgage rates remain low until July 2012. It is only then that the record low base rate of 0.5 per cent is expected to slowly increase. As a result many five year fixed deals are proving better deals than even a month ago.

Mortgage lending was historically low in June – which is encouraging news for landlords and buy-to-let investors, the Islington Company has learned.

The figures, released by the Council of Mortgage Lenders (CML) this week, has convinced many analysts even further that house prices will fall towards the end of the year, prompting many individuals and families to continue to rent indefinitely.

At The Islington Company our focus is on both Central London and North London. That means areas such as Angel, Islington, Highbury, Holloway, Dalston, Hackney, Shoreditch, Old Street, Clerkenwell, Finsbury Park, Caledonian Road and King’s Cross.

In many of these areas rent increases are much sharper than in property prices where the latest Land Registry figures for the second quarter of the year show the average property in London had increased 0.8 per cent on same time last year to £339,480. This has also had an effect on properties let by The Islington Company.

According to the CML 46,700 mortgages were advanced in June. Despite being a slight increase on the previous month, it is a drop of 11 per cent compared to the same time last year.

The majority of the loans – 28,600 were for people who were moving home, compared to just 18,100 for first-time buyers. The first-time buyer figure was eight per cent down on June 2010.

Howard Archer, chief UK economist at IHS Global Insight, conceded that the housing market had improved slightly but said it gave him no long-term encouragement.

“[the housing market] remains very low compared to long-term norms and we see no reason to change our view that house prices are likely to fall by around 5% overall from current levels measure by mid-2012 in the face of persistent troublesome economic fundamentals," he said.

He added: "Indeed, the current sell-offs in financial markets and growing fears of a renewed serious global economic downturn are unlikely to do much for consumer confidence and willingness to commit to buying a house in the near term."