Over half of homes in the U.K. will be rented in 18 years' time, if the country's property boom continues at its current pace, new research shows.
The U.K. has long been a nation of homeowners rather than renters. But the number of households forced to rent will double over the next two decades, as home ownership moves out of reach for most of the population and housing supply dwindles, according to the Intermediary Mortgage Lenders Association (IMLA).
The group, which represent U.K. mortgage lenders, said the fall in social housing, growing obstacles to homeownership, changes in the employment landscape and high levels of immigration were major factors posing risks to would-be home owners.
Owner-occupation has fallen to 64 percent from 68 percent since 2007, while the private rented sector has grown from 14 percent to 18 percent of households, the IMLA found.
"If current trends continue without a major policy or economic shift to address the shortage of new homes, the majority of U.K. households will be renting in the private and social sectors by 2032, for the first time since the early 1970s – with homeownership increasingly the preserve of the old," its report found.
U.K. house prices have seen record levels of growth, with price rises in much of the country starting to catch up with London. Hometrack noted that 48 percent of the country outside of London saw property price gains in April – the highest proportion since June 2004, and three time higher than the level seen a year ago.
IMLA said more and more people are struggling to buy in their 30s as a result. In the last 12 years, homeownership among 16-24-year-olds in England has dropped to 11 percent from 36 percent, and fallen to 40 percent from 67 percent among 25-34-year-olds.
"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," said executive director for IMLA, Peter Williams.
"The inescapable conclusion is that we need a proper joined-up strategy to adequately serve owner-occupiers, tenants and landlords, and put an end to key forces pulling in opposite directions," he added.