The number of 'living loners' will rise to 9.9 million by 2026 - equivalent to three quarters of the total annual household growth over the next two decades.
The 'Changing UK Household Market' report by Alliance & Leicester Mortgages in conjunction with think tank Centre of Future Studies also predicts the decline of the Mr and Mrs Household with 2.4 children. These trends are partly due to higher divorce rates, with separated couples living on their own again, but also because people are staying single for longer, and then getting married and having families later in their lives.
The number of married couple households is projected to fall over the next 20 years by an average of 34,000 every year. This is as a result of the increase in co-habiting and divorce, although the proportion of family households overall will still drop from 20 per cent in 2004, to 18.5 per cent in 2026.
The percentage decrease in the numbers of family homes and the increase in one-person homes means property developers will have to adapt to the changing household make-up. Over 200,000 extra new properties are needed each year to 2026 to cope with the influx of 'living loners'. This demand could be fulfilled by building or conversions such as city centre loft living.
Stephen Leonard, director of mortgages at Alliance & Leicester, said: "Our 'Changing UK Household Market' report shows the demand for housing will increase over the next 20 years. Interestingly, the pressure will come from the changing make-up of households, as we see more people living on their own, and the concept of the traditional family home steadily being eroded.
"We can expect to see an increase in flats and converted houses in the future due to the rise in the one person household, as understandably, people living on their own will be less likely to splash out on a larger property."
Regional household numbers:
London and the South East are predicted to have the highest rise in households, an average of 36,000 per year, resulting in 3,296,000 and 4,184,000 households in 2026 respectively. At the other end of the scale, the North East is expected to rise by an average of just 5,300 per year - a total of 1,211,000 in 2026.
Leonard commented: "Social trends influence the way we live - right up to the house we live in. We are currently witnessing a change in society that is set to continue well into the future. Mortgage lenders need to recognise that future generations of homebuyers' will have differing needs and financial circumstances and will need to consider this when designing mortgage products."
