If you currently do not own your own home, you are not alone. By 2032, the UK could see more than one in two homes rented for the first time in 60 years if current developments in the market, including the drop in social housing and the difficulties in buying a home, are not addressed, the Intermediary Mortgage Lenders Association (IMLA) warns.
The continuing decline in owner-occupation levels and the fall in social renting would also force more than a third of households to rent privately within two decades, or double today’s figure.
Private renting is currently witnessing sustainable growth and demand, which is also driven by changes in the labour market, the increasing number of students and immigrants, Britons’ increasing tendency to marry later in life and the rising divorce rates. Over the past seven years, private renting has gone up from 14% to 18% of households on the back of a decline in owner-occupation rates, which have slid from 68% to 64%. Social renting has also declined, the association said.
The figures come together with data about buy-to-let mortgages, which showed that such instruments were used to support only 420,000 (31%) of the 1.31 million house in the private rented market made available since 2007. The remaining amount came from cash or commercially funded purchases and properties rented by existing owners.
According to IMLA, if housing supply fails to match population and household growth going forward, first-time buyers will continue to face obstacles in making their dream come true.
The organisation noted that homeownership levels are currently the lowest among the younger demographic, but gradually this will spread across other age groups, suggesting that people in their 30s will also find it much more difficult to buy a house in the near future. Unless the housing issues are addressed, renting will be a reality for more and more of us in the years to come.