A Senior Economist at banking giant NatWest, Sebastian Burnside, has predicted that in eight years’ time, more people will rent their homes than own them.
Quoted in LandlordNews.co.uk in September 2017, Burnside said:
“We think it’s a fairly comfortable bet that, by 2025, we will have more households renting privately than owning their homes with a mortgage, which is a big cultural shift for a country like the UK.”
He said that fewer people are taking out mortgages to buy their first homes because of high house prices. Many young people do not have sufficient income to save for a deposit on their first home. Unless more affordable housing is available, it is likely that young people will continue to rent property.
Presently, there are four million people in rented social housing and this is expected to decrease slightly. The demand for privately owned rental accommodation should increase.
Many older people have paid off their mortgages. The number of people who own their property outright now exceeds the number of people still with a mortgage.
Burnside pointed out that mortgage lenders tend to treat landlords who default on their commercial buy-to-let mortgages more leniently than individuals who default on their mortgage repayments. He urged lenders to reassess their repossession practices.
Even if the number of tenants does not exceed homeowners as Burnside predicts, demand for rented accommodation should remain high, meaning buy-to-let landlords should have little difficulty finding tenants for their properties.