Outlook worsens for ‘generation rent’: only one in four to be homeowners by 2025

Only 26% of 20-39 year olds (‘generation rent’) in England will live in a home they own by 2025, while more than half (59%) will be renting privately by 2025, according to new PwC analysis that looks at private rental/home ownership by age.

Previous PwC research¹ highlighted the plight of “generation rent” – the group of 20-39 year old adults at risk of being locked out of the housing market due to high prices, high deposits and rising interest rates.

The analysis has been extended to look at tenure trends across different age groups in more detail. Key findings are:

• By 2025, 59% of 20-39 year olds will be renting privately, up from 45% in 2013.
• Only 26% of those in generation rent will own their own home by 2025, down from 38% in 2013.
• Older generations, who have benefited from huge increases in the value of the homes they own, will largely be insulated from these trends. Three quarters of over 55s own the home they live in now and this will still be the case in 2025.

 

Richard Snook, senior economist at PwC, said:

“Our updated research sets out the scale of the challenge faced by those in generation rent who are trying to get on the housing ladder. The continual advance of house prices, which have far outstripped growth in earnings, is fundamentally changing the way people live.

“With the majority of 20-39 year olds living in the private rented sector by 2025, policy will need to adapt. This could include encouraging a better quality of private rented accommodation including longer tenure periods, and more rental properties designed for families.

“Demand for housing in the UK has outstripped supply for more than two decades. Changing the outlook for generation rent will require us to build more houses than needed just to match population growth in order to make up the past shortfall between housing supply and growth in demand.”

Ends

Notes:

¹UK Economic Outlook report in July - this earlier PwC research included projections at the aggregate level for the UK as a whole without a detailed breakdown by age group. Our updated research is for England only, for which we can now provide a more precise breakdown by age group.

 

Gill Carson
PwC | Media Relations
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PricewaterhouseCoopers LLP
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