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Private rental sector predicted to grow in size
The will be an additional 1.2 million households in England & Wales in the private rented sector by 2019 meaning that 24 per cent of all homes will be privately rented.
That is the forecast from Savills, which says that within five years only one in six under-35s (equivalent to 16 per cent) will be home owners compared to 28 per cent now.
Similarly, numbers of 35-49 year olds in private renting almost doubled from 2001 to 2011, to account for one in five households nationally. By 2019 there will be over two million private rented households in this age group, an increase of over 30 per cent.
The situation is particularly acute in London, where average prices are 30 per cent above their 2007 peak making it more difficult than ever to access home ownership.
A quarter of a million more London households are forecast to be living in private rented accommodation by 2019, taking the total to 1.24 million, well over a third (36 per cent) of all households. Owner occupied household numbers will fall by 100,000 to 1.46 million, or just 42 per cent of the total Savills forecasts.
While the 50 to 64 age group will account for a 175,000 rise in private rented household numbers, owner occupier household numbers are also forecast to rise by 337,000, a reflection both of an ageing population and the knock-on effect of the growth in home ownership in the second half of the 20th century.
Around 72 per cent of this age group will be owner occupiers by 2019.
The over 65s are the only age group where numbers of private renters are forecast to fall, by 42,000, as owner occupation in the generation continues to rise.
Around 80 per cent of over 65s are expected to be owner occupiers by 2019, occupying over five million homes with very low levels of outstanding mortgage debt.
“These numbers present huge challenges to government, to institutional investors with the capacity to underwrite the delivery of new rental stock in volume, and to older home owners to pass down their housing wealth to younger family members,” says Neal Hudson, senior residential research analyst at Savills.
