An extra million households will be forced into rental accommodation over the next five years as rising home prices out lock potential buyers out of the property market, new research has warned.
Property consultant Savills said 200,000 more households a year in the private rented sector would also push up the cost of tenancies by 21%, hitting the ability of families to save up for a deposit.
The biggest group of private tenants is aged between 25 and 34, but the fastest-growing group are between 35 and 44, a quarter of them having young families. They are becoming known as “Generation Rent”, with many never expected to own their own homes.
Savills’ report said that levels of homeownership began to decline in the early 21st century, before the credit crunch began, pushing more people into the private rented sector. Meanwhile, the social rented sector continued its relative decline with the number of those renting privately overtaking social tenants in 2011.
There were 4.3 million households in the private rented sector in the UK in 2011. Savills expects this number to grow by one million over the next five years.
The mismatch between supply and demand is driving up rents and forcing tenants into sometimes poor quality rental housing with little security of tenure.
Savills’ Susan Emmett said: “Although the property market is strengthening and mortgage availability is improving, many households are being left behind. The new excluded are unlikely to qualify for social housing yet their incomes are not high enough to take advantage of the market recovery.”
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