Numbers renting set to rise substantially as markets lock them out of home purchase

The number of households renting is set to rise by 1.2 million over the next five years, to more than 6 million in 2019.
Two thirds of under 35s will be renting, while an older age group of ALFs – asset-less forty-somethings – will become a major renting phenomenon. These are some of the predictions laid out in a new research report on the private rented sector, delivered by Savills.
London is where the most acute changes will be seen. Private rented households in the capital are expected to rise by 250,000 to 1.24 million by the end of 2019, more than a third of all households. In contrast, the number of owner occupiers is set to fall; while the numbers in social rented housing are expected to see a very modest increase overall.
The number of ALFs is set to rise by 30% over the period, this growth in a group that has already doubled since 2001. Such people in the age range 35-49 will typically have few financial assets, and possibly little put away for old age. “There is an increasing number of forty-somethings unable to get on the housing ladder in the current mortgage environment,” said Lucian Cook, responsible for residential research at Savills. Such people are going to become increasingly reliant on their parents for support, despite their advancing years. The only solace in this, say Savills, is that many more of the older generation were in a position to buy their own homes, and end their working lives asset rich.

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