In 2013 38% of 20-39 year olds were homeowners, but the number living in private rental accommodation instead will rise from 45% in 2013 to 59% in 2025.
Annual house price inflation reached 6.1% in September and rents increased by 3.8% to October, today’s Office for National Statistics and Landbay figures show respectively.
Older generations will be insulated from the trends due to huge increases in house prices, as three quarters of over-55s own the homes they live in, but some tenants will be shut out of buying due to the every-growing cost of renting.
Richard Snook, senior economist at PwC, said: “Our updated research sets out the scale of the challenge faced by those in generation rent who are trying to get on the housing ladder.
“The continual advance of house prices, which have far outstripped growth in earnings, is fundamentally changing the way people live.
“With the majority of 20-39 year olds living in the private rented sector by 2025, policy will need to adapt. 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.”
