According to new research, if the current rate of people not moving onto the housing ladder continues at the pace it has been it will not be long before there are more people in the UK renting than owning their own home.
Since 2010 the percentage of the housing market made up of homeowners has dropped from 70% to 65%. Based on current trends this would become 49.3% within 20 years, meaning most of the market will be comprised of renters.
Further, the analysis from VeriSmart shows that the figure will be 55% renting and 45% owning by 2045.
This is an unsurprising revelation to anyone familiar with the so called “generation rent” issue in the UK today. It is becoming more difficult for new buyers to enter the housing market, and simultaneously becoming more attractive to keep renting. This bodes well for the investment case of residential property, for the long term especially.
‘We are currently seeing a shifting mentality in the way we choose to live our lives and for Generation Rent, in particular, there is no longer that urgency to make it out of the rental sector and secure their own ‘piece’ of bricks and mortar,’ said Jonathan Senior, chief executive officer of VeriSmart.
‘This was initially driven by consistently buoyant house price growth coupled with stagnant wage growth providing no other option but to rent, however, social rental numbers are falling, Build to Rent is growing in prominence, and there has been a number of tenant friendly changes to the sector,’ he explained.
‘All of these changes are making the rental sector a more attractive place to be and as a result, we are seeing more of us opt for it and stay there for much longer than we may have traditionally,’ he added.
Comparing ourselves to the other European nations – The UK is 24th out of 28 for number of homeowners in the market, and by contrast, has the 5th highest percentage of tenant occupiers.