New figures published by the Office of National Statistics show just how difficult it is for people in their 20s and 30s to get on the housing ladder.
According to the ONS, people aged 25-29 are now more likely to rent privately (43.3%) than own a home with mortgage (39%).
This tipping point in home ownership across the UK marks a dramatic change from just 15 years ago, when people in their late 20s were more than twice as likely to own a property (56.5%) rather than rent privately (21.4%).
Laura Gardiner, senior policy analyst at think-tank the Resolution Foundation, said: “We’ve reached a tipping point in the UK housing market where young people are now more likely to rent privately than own their home.
“This dramatic shift from owning to renting has major consequences for young people and future generations. For many people, it brings major insecurity in terms of their housing costs and being able to find a secure long-term home.
“Ultimately it also means the nation’s wealth will become increasingly concentrated amongst a smaller pool of home-owners, with serious implications for social mobility.”
New research from Experian has found that one in 10 young people have struggled to raise a deposit and as a result been forced to delay their plans to buy.
Would-be first-time buyers who have been frustrated in their attempts to get onto the housing ladder are more likely to be single parents or couples with children.
The study, which questioned 1500 renters, found that one in five private tenants don’t believe they would be accepted for a mortgage so feel renting is their only option.
These tenants either doubt they would get a mortgage or have had difficulty securing one, or have struggled to get a deposit together. Three-quarters of this group (74%) would like to see rental payments contribute to their credit report.
Commenting on the latest ONS figures on the rental market, Experian’s Vicky McNab said: “These figures show how difficult it is for Generation Rent to afford their monthly rent while saving enough for a deposit to buy their first home.
“Although there are a significant number of people who find renting suits their circumstances for the moment, there are many frustrated first-time buyers who have put their plans to buy on hold because they have struggled to save for a deposit or don’t believe they would be accepted for a mortgage.
There are fears that first-time buyers are being squeezed out of the market due to the dwindling supply of suitable homes and ballooning property prices.
Tougher affordability checks from lenders and rising house prices have made it increasingly difficult for first-time buyers with smaller deposits to get on the property ladder.
Low interest rates combined with the economic recovery have done little to reduce the need for rented housing, while house price inflation ahead of wage growth has pushed property prices out of reach for many.
A recent study by the Resolution Foundation found that the housing ladder is rapidly disappearing for most young working households on modest incomes. According to the research, over-45s now account for three-quarters of all home owners and that only one in 10 young people are likely to be on the property ladder in 2025.
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