Just one in four households could have a mortgage by 2025 if the economy continues to stagnate, despite 81% of the population hoping to be home owners in 10 years’ time.
A report commissioned from Cambridge university by the Resolution Foundation and Shelter claims that if the economy remains weak, the proportion of households owning a home with a mortgage will decrease to 27% by 2025, down from a peak of 43% in the early 1990s.
Meanwhile, the proportion of people renting their homes in the private sector will continue to expand, according to the report, rising from just 7% in 1994 to 22% by 2025.
In London, more than a third – 36% – of households will be renting by 2025.
The gloomy outlook does not tally with consumers’ expectations, however.
According to research from YouGov, 81% of British adults hope to be home owners in 10 years’ time, and 74% aspire to buy a home within two years.
Campbell Robb, chief executive of Shelter, says renting is increasingly becoming a way of life for British families.
He adds: “It’s time the government woke up to the fact that rental Britain is here to stay. With more families renting than ever before, we need to make renting fit for purpose for the growing cohort who want a stable and secure home to raise their children in.”
Bob Pannell, chief economist at the Council of Mortgage Lenders, says that for many people, owning a home is merely a pipe dream.
He adds: “We need to ensure that good quality housing is available in a variety of tenures and that the growing private rented sector represents an attractive choice for those who do not want, or cannot attain, home ownership.
“However, we also need to recognise that for the overwhelming majority of people, home ownership is still the ultimate goal.”