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Housing Ladder Collapses for Under 40s

July 22, 2015

A new report from accountancy firm PwC UK predicts that more than half of people under 40 will be in the private rented sector by 2025. House price rises of 5% a year and a lack of affordable homes are just two of the reasons why levels of home ownership have declined.

Whilst the under 40s have been particularly badly hit, the research suggests that by 2025 a quarter of all households will be rented. In 2001 there were only 2.3 million properties in the private rented sector; the figure currently stands at 5.4 million with an increase to 7.2 million predicted in the next decade. Whilst price rises have levelled at 5%, the report says the average UK home will be worth £360,000 by 2020 compared to the current figure of £279,000.

Richard Snook, Senior Economist at PwC, told the BBS website “Driven by a decade of soaring house prices before the financial crisis and lower loan-to-value ratios post-crisis, the deposits needed by first time buyers have risen significantly. As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20 to 39 age group.”

According to official statistics, there were 118,760 new homes constructed in 2014 with 1.37 million households on the social housing waiting list.

You can view a copy of the full report HERE