A shift in the tenure landscape is expected over the next decade as the majority of young professionals turn to the private rented sector.
- A third of young professionals will be living in private rented accommodation by 2025
- Competition between lenders has resulted in buy-to-let mortgage rates to reach their lowest on record
- The quality of properties within the private rented sector is expected to improve due to increased demand
Almost two thirds of 20 to 39-year olds in England will be renting by 2025, research shows.
The biggest tenure shift is believed to be among 25 to 34-year olds, with nearly 60% of households living in rented private accommodation by 2025, compared with 48% in 2013.
Of those aged between 35 and 44, it is believed a third will be renting in a decade’s time, compared with 24% in 2013. Among 45 to 54-year olds, the figure is expected to rise from a sixth to 21%.
Property price increases, coupled with wages failing to keep up with the growth, have systematically changed how people live and resulted in a significant shift in the tenure landscape, PricewaterhouseCoopers (PwC) said. This increase in demand for private rented accommodation could result in positive changes within the sector.
Richard Snook, Senior Economist at PwC, said: ““This could include encouraging a better quality of private rented accommodation including longer tenure periods, and more rental properties designed for families.
“Demand for housing in the UK has outstripped supply for more than two decades. Changing the outlook for generation rent will require us to build more houses than needed just to match population growth in order to make up the past shortfall between housing supply and growth in demand.”
To keep up with increasing demand for private rental accommodation, cities across the UK are witnessing a boom in specialised construction for the private rental sector (PRS). Over 10,000 new PRS flats are expected to be built in Manchester alone over the next few years, with 2,170 already in construction.