Renters to increase by a million over the next five years

Posted on November 7th, 2013 | Categories - News

iStock_000022387205XSmallDespite the efforts of the Government to encourage more people to buy their own home, new research has shown the number of renters is on the rise.

The figures from high end estate agency Savills, have predicted a 21% increase in the number of people renting their home, equivalent to an extra million people, by 2018. In London, where property prices have risen significantly over recent months, the increase is set to be even higher, at nearly 25%.

Six million renters

According to the research, by 2018 5.8 million households will live in rented accommodation, up from 4.8 million in 2013. At the same time the number of homeowners is expected to remain static, meaning the current Government initiatives are likely to have little impact on the overall number of homeowners.

Despite Government schemes such as Funding for Lending and Help to Buy, coupled with all-time low interest rates, it seems many would-be homeowners are still unable to get onto the housing ladder, partly due to high house prices, especially in the capital, as well as the need to fund a deposit, even after the introduction of the Help to Buy scheme.

Lucian Cook, Head of UK Residential Research at Savills, said: “We anticipate that the major beneficiaries of any increase in net lending are likely to be existing home owners. Its impact on rapidly rising rental demand will be limited, most notably in London where almost 26% of households currently live in the private rented sector.”