Fresh research from the Institute for Fiscal Studies (IFS) which reveals that young adults are less likely to own a home than ever before reinforces the fact that the private rented sector (PRS) remains a vital part of the housing market.
The PRS, which provides homes to a fifth of the population and almost 2 million families with children, is now larger than the social rented sector, accounting for some 4.7 million households, according to the English Housing Survey, and this figures looks set to grow further.
The study by the IFS shows that for 25 to 34-year-olds earning between £22,200 and £30,600 per year, homeownership fell to just 27% in 2016 from 65% two decades ago.
Alejandro Artacho, CEO and co-founder of Spotahome, commented: “It is getting increasingly difficult for young adults to get onto the property ladder, and this is driving the growth of the rental market. Renting is now becoming the go-to accommodation option for many people.”
Additionally, there has been a considerable increase in the proportion of 35-44 year olds in the PRS, from 11% in 2006/7 to 29% in 2016/17.
David Smith, policy director for the Residential Landlords Association, said: “This huge increase in the number of young people unable to buy their own home means that more are renting and for longer periods. This shows the folly of government policy imposing higher taxes to deter investment in new homes to rent.
“The scale of the housing crisis demands a complete re-think from government with policies needed to support investment in homes to rent to meet the increasing demand.”