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.”