It is predicted that 40 years old will soon become the average age of people who become first time buyers. An equally ominous statement, made by the UK's largest listed specialist residential landlord, is that there is great concern the younger generation may indeed be cut out of the rental market.
Over half of all Britons, at 54%, believe the number of homeowners will decrease over the next few years. So within 15 years time it is expected more people will be tenants renting a wide variety of properties. This will shift the image of what typical tenants will be from the current idea of a terraced house being occupied by young families, students or graduate professionals. In addition to this, 67% of Britons believe that renting long term is going to become more and more common for UK residents.
The reason for this predicted change in the housing market is due to the increased difficulty for people to attain a mortgage in these difficult economic times. Being able to have an affordable and available mortgage is tough so for people who are eager to move house, rented accommodation is the next best thing.
To make things even more challenging for home hunters, the actual supply of houses available to be rented is growing at the extremely low average of 0.7% per year. This percentage equates to around 158,000 homes each year which is nearly not enough, considering the rapidly rising demand.
With more people becoming tenants, it is expected that the amount of people taking out Tenant Insurance will also increase. The Chief Executive of Grainger, Andrew Cunningham, stated that "there will be an increase in the private renting sector in the UK".
Some areas of Britain will feel the impact of this harder than others. In London, for example, the 2012 Olympics have given landlords the opportunity to vastly increase the amount they charge for rent. With visitors from all around the world visiting, they are more likely to pay premium prices unlike local residents. Some landlords have gone to extra lengths to ensure they can capitalize on this event by including clauses in their contracts that tenants must leave during the Olympic months. That way they can invite higher paying individuals to be their tenants. In other cases, landlords are just simply issuing eviction notices. This will further increase the number of people seeking rental properties this summer in London.
It was just a few years ago that at 70%, home ownership had reached its peak. Now, however, Mr Cunningham expects this figure to decline easily to 60% in the space of 7 years.