The proportion of young adults in ownership of their homes will continue to decline over the next five years, according to estate agency Savills.
Lucian Cook, Savills UK head of residential research, has estimated that by 2019 just one in six owner occupiers will be under 35 years of age with their share in the sector nearly halving – to 16 per cent from 28 per cent currently.
On the other hand, around 80 per cent of people aged 65+ are expected to live in their own properties by 2019, occupying five million homes with very low levels of outstanding mortgage debt.
Homeownership overall is expected to decline and give way to more private rented properties in the next five years and young households will be most affected. Two-thirds of under 35 year olds will rent by 2019, according to Savills’ research.
The number of households renting privately in the 35-to-49 age group is seen jumping by 30 per cent by that year.
The number of owner-occupied households is expected to drop to 1.46 million, accounting for just 42 per cent of the total, Savills’ data shows.
The figures indicate a serious generational divide in the country which, in Savills’ view, needs to be addressed by the government.
Looking ahead to the upcoming General Election, Cook comments:
“We urgently need a co-ordinated, long term response to the housing crisis rather than short term populist policies that only address a few of the symptoms.
“A new government will need to front up to the need to provide a bigger, better private rented sector and find ways to encourage the recycling of existing housing wealth so younger households can get on and trade up the housing ladder.”
According to Savills forecast, the number of private rented households will continue to rise, while levels of owner occupation will continue to slide as higher interest rates, greater mortgage regulation and an acute housing shortage further reduce access to mortgaged home ownership.
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