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Over Half of Under-40s Will Live in PRS Within a Decade
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Over half of those under 40-years-old will live in the private rental sector by 2025, new research suggests.
Over Half of Under-40s Will Live in PRS Within a Decade
The study, by accountancy firm PwC, also says that homeownership will fall to around 60% and the amount of households renting privately will increase to 7.2m in the same period.
PwC warns that the difficult housing situation faced by young people at present will worsen within five years.
Seb Klier, of tenant group Generation Rent, told Channel 4 News that there could be “radical action” ahead.1
He believes that angry protestors could go on rent strikes and forcefully oppose evictions.
PwC also predicts that house prices will rise at an average rate of 5% per year, making the average house price £360,000 by 2020.
First time buyers need a deposit of 18% of the property value, meaning that in 2020, they must save a deposit of £64,800.
PwC also cautions that the gap between the young and old will widen, as the young are unable to buy and many older homeowners will own their properties outright, because they have either paid in cash or paid off their mortgages.
The firm expects the number of homes owned outright to increase from 8.4m now to 10.6m in 2025, accounting for 35% of the total housing stock.
Senior Economist at PwC, Richard Snook, says: “Driven by a decade of soaring house prices before the financial crisis and lower loan-to-value ratios post-crisis, the deposits needed by first time buyers have risen significantly.
“As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20-39 age group.”1
