Britain is becoming a nation of renters rather than homeowners with every region expected to see levels of ownership fall over the next decade.
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A study of home ownership by financial advice firm PwC sees buy to let as a growing phenomenon despite government efforts to cool the market with tax, stamp duty and mortgage reforms.
The firm has looked back to the year 2000 and calculated 60% of Londoners owned the home where they lived and the rest rented from private landlords or social housing.
Looking ahead, the firm reckons these figures will reverse and fewer homes will be rented from social landlords and more from buy to let investors.
The report looked at home ownership regionally and revealed a similar pattern nationwide.
Declining home ownership nationwide
PwC senior economist Richard Snook said: “We have seen a sharp decline in home ownership in London and a big increase in private rental in the past 15 years.
“Rising house prices are making homes in the capital out of the reach of the budgets of most people. Renting has become the norm in just 25 years after a century of increasing levels of home ownership.”
The report also sees the availability of social housing falling rapidly in London.
With almost two-thirds of homes in the London rented out by 2025, 40% will be provided by buy to let landlords and only 20% by social housing providers.
Demand for homes lags supply
“Hopefully, the standard of private accommodation will improve, with landlords offering longer tenancy agreements and more family homes,” said David Snell, a partner at PwC.
“Demand for homes is lagging well behind supply and has done so for at least 20 years, especially in the capital and the government will have to see more homes built just to make up the shortfall between demand and supply over this time as well as for a growing population.”
The PwC report also expects the private rental sector to increase quicker in Scotland and Northern England as buy to let starts from a lower base level and the regions have more social housing than the south.
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