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| House prices: Renting to overtake home ownership among young, says PwC | House prices: Renting to overtake home ownership among young, says PwC |
| (about 17 hours later) | |
| More than half of the under 40s will be renting homes from private landlords in the UK in 10 years' time, accountancy firm PwC has predicted. | More than half of the under 40s will be renting homes from private landlords in the UK in 10 years' time, accountancy firm PwC has predicted. |
| It suggests house prices will rise at an average of 5% a year, pricing the typical home at £360,000 by 2020. | It suggests house prices will rise at an average of 5% a year, pricing the typical home at £360,000 by 2020. |
| Industry figures show that first-time buyers typically need to find a deposit of 18% to secure a mortgage. | Industry figures show that first-time buyers typically need to find a deposit of 18% to secure a mortgage. |
| Using PwC data, that would equate to a requirement for £64,800 in savings to get on the property ladder in 2020. | Using PwC data, that would equate to a requirement for £64,800 in savings to get on the property ladder in 2020. |
| "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," said Richard Snook, senior economist at PwC. | "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," said Richard Snook, senior economist at PwC. |
| "There is also a rising dichotomy in the market between those - mostly older - households who own outright and those - mostly younger - households who still have a mortgage or rent to pay." | "There is also a rising dichotomy in the market between those - mostly older - households who own outright and those - mostly younger - households who still have a mortgage or rent to pay." |
| Ownership | Ownership |
| Ownership issues for young adults would become more acute owing to a lack of supply in affordable housing, the PwC report suggested. | Ownership issues for young adults would become more acute owing to a lack of supply in affordable housing, the PwC report suggested. |
| The contrast between young and old would be marked by the number of people owning their homes having bought in cash or having paid off a mortgage. | The contrast between young and old would be marked by the number of people owning their homes having bought in cash or having paid off a mortgage. |
| The number of homes owned outright would rise from 8.4 million now to 10.6 million by 2025, accounting for 35% of the total, PwC said. | The number of homes owned outright would rise from 8.4 million now to 10.6 million by 2025, accounting for 35% of the total, PwC said. |
| Overall, it predicted that the proportion of residents who owned the home they lived in would drop from its peak of 70% in the middle of the last decade to about 60% in 2025. | Overall, it predicted that the proportion of residents who owned the home they lived in would drop from its peak of 70% in the middle of the last decade to about 60% in 2025. |
| About 7.2 million households would be private tenants in 10 years' time, it suggested. | About 7.2 million households would be private tenants in 10 years' time, it suggested. |
| The recently-published English Housing Survey found that, in 2013-14, some 48% of households made up of 25 to 34-year-olds rented their home from a private landlord. | The recently-published English Housing Survey found that, in 2013-14, some 48% of households made up of 25 to 34-year-olds rented their home from a private landlord. |
| This had risen from 45% a year earlier, and from 21% in 2003-04. | This had risen from 45% a year earlier, and from 21% in 2003-04. |
| Over the same 10 years, owner occupation in this age group dropped from 59% to 36%. | Over the same 10 years, owner occupation in this age group dropped from 59% to 36%. |
| In 2013-14, of the 22.6 million households in England, 7.4 million owned their property outright, and 6.9 million had a mortgage, the survey showed. The rest rented their homes. | In 2013-14, of the 22.6 million households in England, 7.4 million owned their property outright, and 6.9 million had a mortgage, the survey showed. The rest rented their homes. |