UK Private Rental Sector To Outnumber Owner Occupiers By 2039
The private rental market could become the most dominant section of the property market within the next twenty years if market forces do not change.
A generation of consistently rising house prices when coupled with poorly moving wage growth has created an affordability barrier that many feel they will never be able to break. According to research by Verismart, a huge proportion of the population have resigned themselves to renting property indefinitely.
Since 2010, those renting privately in the UK has increased by 5% whilst the amount of owner occupiers has fallen by the same number.
Verismart speculate that, based on the current trends, by 2039, 50.7% of the population will be privately renting their property. This will increase to 55% by the year 2045.
Of the 28 EU nation states whose population own and occupy their property, the UK is ranked 24th with little over 65% of the population owning and living in their property. Conversely, the UK has the fifth highest number of tenant occupiers in the EU behind Austria, Denmark, France and Germany.
The research suggests that the rental sector is becoming a lot more appealing to people as recent legislative changes have handed more power to tenants which could result in fewer renters looking to save for a deposit with any urgency.
Jonathan Senior, Chief Executive Officer of VeriSmart, commented:
“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.
“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.
“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.”
Do you think that this decline in home ownership will continue falling in the future?