Huge rise in renting figures predicted
Only one in four households will own a mortgage by 2025 if the economy continues to stagnate, claims new research which says record numbers will be pushed into the private rented sector
The new report, commissioned by the Resolution Foundation and Shelter from Cambridge University, examines the housing market and how it will change if low levels of house building, problematic mortgage finance and low income growth continue.
Among its claims are:
* the proportion of households owning with a mortgage will drop to one in four (27%) by 2025
* the proportion of people renting their homes privately will continue to expand, rising to 22% by 2025
* In London more than a third (36%) of households will be renting by 2025, up from 25% at the moment
The report also predicts that more families with children will be renting than ever before. It points to figures showing that the last five years have seen a 86% increase in families with children who are renting their homes and that this growth appears set to continue. In London, renting is expected to overtake mortgaged homeownership by 2020 and become the norm for more and more people.
“This report shows what is fast becoming the new reality of our housing market in the current economic climate, home ownership continuing to fall while renting becomes a way of life for British families," said Shelter’s chief executive Campbell Robb.
"Yet despite the growing pressure on the rental market, the government’s recent Housing Strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face. It’s time government woke up to the fact that Rental Britain is here to stay. With more and more families renting than ever before, we need to make renting fit for purpose for the growing cohort who want a stable and secure home to raise their children in.”
Vidhya Alakeson, Director of Research at the Resolution Foundation said: “This report is further evidence of the urgent need for more and better quality rented accommodation that meets the needs of families with children. It’s encouraging that the government has launched a review of institutional investment in the private rented sector, but this report reveals the true nature of the future challenge and the scale of the response needed.”
Caroline Kavanagh of Townends estate agents commented they had seen a steady rise in the number of tenants keen to share rental properties to split bills and save money. "Far from the days when the flat-share domain was reserved for students, in these more austere times, property sharing is a growing trend, especially among young professionals looking at how they can cut their outgoings in order to save for a deposit."
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