Rental sector boom as only one young person in four will own by 2025
Only 26 per cent of people currently aged 20 to 39 in England will live in a home they own by 2025 while 59 per cent of them will be privately renting.
The forecast, from business consultancy PwC, looks at the young non-owning segment of adults which in the consultancy’s words “is at risk of being locked out of the housing market due to high prices, high deposits and rising interest rates.”
It says that by 2025, 59 per cent of 20-39 year olds will be renting privately, up from 45 per cent in 2013, when a similar survey was undertaken. Only 26 per cent of those in generation rent will own their own home by 2025, down from 38 per cent in 2013.
Older generations, who have benefited from huge increases in the value of the homes they own, will largely be insulated from these trends. Three quarters of over 55s own the home they live in now and this will still be the case in 2025.
“With the majority of 20-39 year olds living in the private rented sector by 2025, policy will need to adapt. This could include encouraging a better quality of private rented accommodation including longer tenure periods, and more rental properties designed for families” says Richard Snook, senior economist at PwC.
“Demand for housing in the UK has outstripped supply for more than two decades. Changing the outlook for ‘generation rent’ will require us to build more houses than needed just to match population growth in order to make up the past shortfall between housing supply and growth in demand” he says.