London will be a city for renters rather than owners in 2025, research by PwC reveals.
The forecast outlines a deterioration of the problems for the Generation Rent, with an increase of rental housing in the UK capital. People born in the late 1980s and in the 1990s will be most affected.
The research shows a reversal of the situation in 2000 when homeowners were about 60 percent. Instead, 60 percent of Londoners will rent a home rather than owning one in 2025. Of these, 40 percent will be private rents and 20 percent social rents.
The increase of prices for renting and the decline of average income are the main causes of this trend.
Richard Snook, senior economist at professional services firm PwC, told the Financial Times earlier on Tuesday: “High prices are making homes in the capital unaffordable to most and could undo a century-long trend towards rising home ownership rates.”
The Office for National Statistics said that housing prices rose by 6.7 percent all over the UK in 2015. London led the way with a increase by 9 percent.
According to the housing portal Homelet, the average rental price in London is £1,510 a month, while in the rest of the UK is £740.
Campbell Robb, chief executive of Shelter, an organisation that helps find homes, said: “The shortage of affordable homes in the capital is putting huge pressure on London’s renters. But it doesn’t have to be this way. Many renters in Europe enjoy greater stability, and there’s no reason London’s tenants can’t as well.”
He went on: “To turn around this crisis, the next Mayor of London must prioritise longer, more stable tenancies in the capital, and finally commit to building the genuinely affordable homes that Londoners are crying out for.”
As the elections for the Mayor of London are fast approaching, the housing issue is already dominating the debate.
Earlier on Tuesday, Sadiq Khan, the Labour candidate, promised to set up a non-profit lettings agency to tackle the problem.
As Mayor I’ll set up a not-for-profit lettings agency, rejecting rip-off fees and offering secure, long-term rents. https://t.co/M2adG0ABqh
— Sadiq Khan (@SadiqKhan) February 16, 2016
Zac Goldsmith, the Conservative candidate, has said, through his Press Office, that he will provide more houses by clamping down on building delays.
— BackZac2016 Press (@BackZacPress) February 16, 2016
Subedited by Katy Scott