Families to be pushed into private rented sector
More families will be pushed into the private rented sector if the economy does not pick up, says a Cambridge University report.
The research, released yesterday, predicts around one in four (27 per cent) of households will have a mortgage by 2025 compared with the peak of 43 per cent in the early 90s and 31 per cent this year.
Private renting would be expected to go up from the current 18 per cent to 22 per cent, the report commissioned by homelessness charity Shelter and research organisation the Resolution Foundation suggests. That figure was 7 per cent in 1994.
The research notes the number of private-renting families has doubled to 20 per cent in the three years from 2006/2007.
Shelter calculates there has been an increase of 86 per cent of families with children renting their homes. In London renting is expected to overtake mortgaged homeownership for families by 2020.
The report suggests for families on low to middle incomes, private renting will rise to 27 per cent from around 25 per cent in 2012 if current economic trends continue.
It also shows social rented housing will remain important for low to middle income families, particularly in London where more than 50 per cent will still rent socially in 2025 if they are able to do so. Just under 50 per cent currently social rent in the capital.
Although mortgage homeownership for families with dependent children will remain the largest tenure it will drop to 47 per cent by 2025 from 55 per cent in 2009/10 and 59 per cent in 2000/01.
Shelter’s chief executive Campbell Robb said: ‘This report shows what is fast becoming the new reality of our housing market in the current economic climate: homeownership continuing to fall while renting becomes a way of life for British families.
‘Yet despite the growing pressure on the rental market, the government’s recent housing strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face.
‘It’s time government woke up to the fact that “rental Britain” is here to stay.’
Vidhya Alakeson, director of research at the Resolution Foundation, said: ‘It’s encouraging that the government has launched a review of institutional investment in the private rented sector, but this report reveals the true nature of the future challenge and thus the scale of the response needed.’
The government announced it would launch an independent review into investment in the private rented sector in its housing strategy in November last year. Head of the review Sir Adrian Montague started asking for evidence in February this year.