Half of Under 40’s to Privately Rent by 2025

The rental market is growing in strength, thanks in part to both the rise of house prices and the lack of social housing. A recent report from accountants PwC has found that the number of households in the private rental sector has more than doubled since 2001 and forecasts that, should the trend continue, we will be looking at 1.8million private renters by 2025.

This would take the UK to a total of 7.2million households and equate to almost a quarter of the population. According to the report the trend will be particularly applicable to what is known as the ‘Generation Rent’ gap, of those aged between 20 and 39, and of whom 50% are anticipated to be privately renting by 2025.

PwC also anticipates that more people will be renting than taking on mortgages in just a decades time. With a drop from 10million in 2001 to just 8million mortgages last year, there is certainly a trend massively towards private rentals. By 2025 it is expected to drop even further to 7.2million, thanks to limited housing and mortgage availability further handicapping first time buyers and preventing them from stepping on to those first rungs of the ladder.

According to PwC it is the significant rise in the cost of a deposit that is placing first time buyers in such difficulties and bringing about this trend more towards rental properties. What is certain should the trends continue is the emergence of a generation of private renters, a group that will consider private rental the norm between the ages of 20-39.

The peak of owner occupied property was in the mid-2000s, when 70% of the population were buyers both with and without a mortgage. By 2025 it is anticipated that this will fall to 60%, finally seeing a reversal of those post war years when owner occupation rose and rose. The way to combat this, as it was then, is to start to build an affordable housing supply, with incentives and reforms put in place to truly tackle the housing shortage. Announcements made recently in the budget make this seem an unlikely option, making ‘Generation Rent’ almost an inevitability and the drop in mortgages to only increase.

With demand inevitably on the rise, it is important that your property provides exactly what prospective tenants are looking for and that you’re marketing yourself at a competitive price for both the home and its location. You can find out exactly how much that is by speaking to Orchard & Shipman and taking advantage of our FREE Rental Valuation service. By getting your property professionally assessed you are putting yourself in the best possible position to make the most of your investment. Simply call your local Orchard & Shipman property experts and book yours today.