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Just one in four households will have mortgage by 2025

Just one in four households will have a mortgage by 2025 if the economy continues to stagnate, a report commissioned by the Resolution Foundation and Shelter from Cambridge University has found.

The report looks at how the housing market will change if current economic trends continue, including low levels of house building, constrained mortgage finance and low income growth.

It found that while Britain’s economy remains weak the proportion of households owning with a mortgage will decrease to one in four – 27%, by 2025, down from a peak of 43% in the early 90s.



Meanwhile, the proportion of people renting their homes privately will continue to expand, 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 report also projects that more families with children will be renting than ever before. The past five years have seen a massive 86% increase in families with children renting their homes, growth which looks set to continue – particularly in London where renting will overtake mortgaged homeownership among families by 2020.



Campbell Robb, chief executive of Shelter, says: “This report shows what is fast becoming the new reality of our housing market in the current economic climate: home ownership continuing to fall while renting becomes a way of life for British families.



“Yet despite the growing pressure on the rental market, the government’s recent Housing Strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face.

“It’s time government woke up to the fact that Rental Britain is here to stay. With more and 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.”

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  • Bob the builder 12th June 2012 at 3:16 pm

    In response to the above, the reason it is possible is that the research was commissioned by Shelter which would suggest that the findings are highly biased towards their end goal!

    This coupled with the comments from their CEO, Campbell Robb, and I quote “It’s time government woke up to the fact that Rental Britain is here to stay.” would suggest that the report is nothing short of political nonsense and yet another waste of money!

  • Mary Lockyer 11th June 2012 at 1:12 pm

    I have a question on how this will be possible – based on affordability. With reduced incomes in retirement, (we know a greater ratio of the population will be aged 65 plus in 2025) people will be compelled to downsize as the Government will be unable to afford to subsidise rents on such a scale. We may see a radical change in demand for our housing stock, and there is little time for this to be achieved. Many are relying on housing inflation to enable them to downsize and redeem their interest only mortgages, which could push demand up for smaller housing units, and see a falling demand for the higher middle end of the housing market.