'Half of Brits will be renting by 2032'

An increasing number of people will be renting their homes in London, a new report has found.

Research, published by the Intermediary Mortgage Lenders Association (IMLA), found that half of UK homes will be rented by 2032 for the first time in 60 years, if housing shortages and price rises are not tackled.

Its figures showed the private rented sector has grown from 14 per cent to 18 per cent of households. At the same time, owner occupation has dropped from 68 per cent to 64 per cent and social renting has also fallen.

The report also revealed that buy to let mortgages have financed just 420,000 or 32 per cent of the additional 1.31 million houses in the private rented sector since 2007.

Commenting on the findings, Peter Williams, executive director for the IMLA, said: "There are many misunderstandings clouding the growth of buy to let, including its impact on first time buyers. This report is a fresh look at how and why the private rental sector has grown. It asks important questions about our current direction of travel and the failure to build enough homes to support the rising population.

"Growth of the private rented sector has been from a historically low base and has been fuelled by strong underlying demand."

The report also added that the UK has failed to build enough houses to match population and household growth. 

If these current trends continue, according to the IMLA, then the majority of UK households will be renting in the private and social sectors in the future for the first time since the early 1970s.

It also predicted that continuing fall in owner-occupation and the decline of social renting would also mean more than a third of households will be rented privately within two decades.

Mr Williams explained: "If current trends continue then demand for private rented property is likely to drive further expansion and increase the burden on our already overstretched housing stock, at a time when first time buyers are also feeling the pressure of new mortgage market regulations."

Published 21st May, 2014

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