Three out of five Londoners will be renting within a decade, according to analysis from PwC.
It predicts that the private rented sector will account for 40% of the market by 2025, while another 20% will be in affordable rented accommodation. Home ownership in the capital, which stood at 60% in 2000, will have fallen by almost 20%.
“In just 25 years the city has been transformed to one in which rental is becoming the norm – especially for younger people,” said Richard Snook, senior economist at PwC.
But London will not be the only area to see a rise in renting. The research expects all regions and countries within the UK to experience falling levels of home ownership and rising numbers of private renting.
Richard Parker, partner in PwC’s housing sector team, said: “Three factors are driving this predicted shift in tenure within the housing sector: a lack of new housing supply has pushed up prices to unaffordable levels for many; mortgage deposits require savings that are well out of the reach of first-time buyers; and younger people increasingly prefer high-quality rental housing.”
Nationally, home ownership will fall to 60% by 2025, from 69% in 2000. Outside London, the largest increase in renting is predicted to be in the North West, Yorkshire and the Humber, and Northern Ireland.
Generation rent (source: CLG tenure data and PwC projections)
| 2000 | 2014 | 2025 | 2000-2025 | |
|---|---|---|---|---|
| % | % | % | (% points) | |
| UK | 9 | 20 | 24 | 15 |
| North East | 7 | 17 | 20 | 13 |
| North West | 8 | 19 | 24 | 16 |
| East Midlands | 8 | 20 | 23 | 15 |
| West Midlands | 7 | 18 | 20 | 13 |
| Yorkshire and the Humber | 9 | 21 | 26 | 17 |
| South West | 11 | 18 | 18 | 7 |
| South East | 11 | 20 | 21 | 10 |
| East of England | 9 | 19 | 19 | 10 |
| London | 15 | 30 | 40 | 24 |
| Wales | 8 | 16 | 17 | 8 |
| Scotland | 7 | 17 | 23 | 16 |
| Northern Ireland | 6 | 18 | 26 | 20 |
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