Record numbers to rent as economy stagnates

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by Gill Montia

Record numbers of Britons could be renting their homes by 2025, should the UK economy continues to stagnate.

According to new research from the Resolution Foundation and homeless charity, Shelter, low levels of house building, constrained mortgage finance and low income growth are likely to result in only 25% of households owning their homes with a mortgage, down from a peak of 43% in the early 1990s.

Meanwhile, the proportion of people renting their homes privately will continue to expand, rising from just 7% in 1994 to 22% by 2025, although in London, more than a third of households could be renting.

The Foundation, which is an independent research body committed to addressing the plight of Britain’s low to middle earners, is also predicting that more families with children will be renting than ever before.

The past five years have seen an 86% increase in families with children renting their homes and a sluggish economy could meant that renting will overtake mortgaged home ownership for families with youngsters as early as 2020.

Vidhya Alakeson, director of research at the Resolution Foundation, says: “This report is further evidence of the urgent need for more and better quality rented accommodation that meets the needs of families with children.”

Shelter’s chief executive, Campbell Robb, adds: “It’s time government woke up to the fact that Rental Britain is here to stay.”