A leading property think-tank, The Intermediary Mortgage Lenders Association, predicts that half of UK homes will be rented by 2032.
It’s been no secret in recent years that more and more people – young people, especially – have been struggling to get on the property ladder. Now, the IMLA has suggested that, by the time the babies of today reach maturity, 51% of UK residential units will be rented either privately or socially.
One of the major factors, of course, has been the Great Recession. Between 2007, when the property market took a nosedive, and 2012, the number of owner-occupied homes in the UK fell to 64%, compared with 71% in 2003.
On the other hand, private rentals increased from 3.6 million to 4.9 million homes over the same period. Aside from the recession, there are a number of social reasons which the IMLA has identified for this shift. An increase in student numbers, higher immigration and later marriage were all suggested as contributory factors.
Indeed, the group with the lowest buying power in the UK at present seems to be single people. Whereas families and couples make up a huge 94% of the buying market combined, individuals account for just 2.8% of property sales.
As Robin King, Director of Move with Us, said: “Average wages in Britain have increased 1.6 per cent in the last year according to the ONS, compared with a 5.4 per cent increase in the price of a flat. If property prices increase at a higher rate than wages, then of course, affordability is reduced.
Bearing this in mind, it’s no real surprise that the first-time buyer market has changed over the last few years. Being priced out of the market means that many so called ‘singletons’ are choosing to stay at home or rent for longer”.
So are we facing a shift away from the traditionally British obsession with home ownership and towards a “Generation Rent”? Well, this partly depends on government policies in relation to new housing. One major problem causing increased property prices is the current UK property shortage.
Executive Director of the IMLA, Peter Williams, predicts that our rising population is bound to force change. He said: “Pressure is likely to grow for planning restrictions to be relaxed to support a large increase in new building and address the chronic failure to keep up with housing demand. The inescapable conclusion is that we need a proper joined-up strategy to adequately serve owner-occupiers, tenants and landlords, and put an end to key forces pulling in opposite directions”.
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