London will become a city of renters, with just 40pc owning their own home in 2025, according to new research from PwC
London will become a city of renters, with just 40pc owning their own home in 2025, according to new research from PwC.
This is a reversal of the situation in 2000, when 60pc of Londoners owned a house, either outright or with a mortgage.
PwC’s forecast of the continuation of ‘generation rent’ will come as bad news to many, including the government, which has been attempting to create a nation of homeowners by artificially boosting the market with schemes such as Help to Buy. George Osborne, the Chancellor, is also penalising landlords by raising stamp duty on buy-to-let properties from April.
Locked out by high prices and unattainable deposits and mortgages, young people will be the hardest hit: just 26pc of those currently aged 20-39 will own their own home by 2025.
This compares with 64pc of households born in 1960 and 1970 who owned a house by the time they were 35.
The rental rate will be highest in London, with a forecast 24.4pc rise in the number of people privately renting in the capital between 2000 and 2025, while in the UK as a whole it will rise by 14.5pc.
Due to low interest rates, those with mortgages are seeing falls in their housing costs, compared to renters, and especially in London. The Resolution Foundation said in a new report “that measured before housing costs, median incomes in London appear to have grown by 2.9pc post-crisis; measured after housing costs, they remain 3.7pc below pre-crisis levels.”
Renting is predicted to increase in every region of the UK; Northern Ireland will see the next biggest growth of renters, at 24.4pc, driven by low levels of house building and a younger population. The slowest growth will be in the South West, at 6.1pc.
Homeowning in Britain peaked in 2003 at 71pc, and has been declining ever since, according to Neal Hudson at Savills. The height of home ownership was boosted by Right to Buy policies of the 1980s.