Almost six million households will be living in private rentals in four years’ time


Almost a quarter of all households will be living in privately rented accommodation by 2021 due to high house prices and declining buying power, according to a survey.

A YouGov poll of 10,000 tenants and 26 companies providing rental properties, commissioned by by Knight Frank estate agents, predicts the proportion of households in private lets will rise from the current 21 per cent to 24 per cent in four years.

That would equate to an increase from five million to 5.79 million households, compared to 14.3 million who are currently owner-occupiers and 4.3 million in social housing.

The proportion of people renting has doubled in the past decade, as house prices have soared and wages have for the most part failed to keep pace with inflation.

Despite house price growth stalling, there is a widespread expectation that values will at least keep pace with wages, which are currently growing around two per cent.

According to the Royal Institute of Chartered Surveyors (Rics), prices will rise an average of 3.5 per cent over the coming five years, squeezing affordability further.

Emphasising the resilient nature of house prices despite economic and political headwinds, the latest monthly index published by LSL Property Services showed house prices in England and Wales hit a new record in May.

An average home rose 0.3 per cent compared to April to reach £303,200, reports The Independent. On an annual basis, the figure was up 4.8 per cent, its fastest growth since January.

Knight Frank predicts more properties to let will be provided by big firms such as insurer Legal and General, who are building purpose-built blocks of flats to provide rental homes.

The “built-to-rent” sector is currently worth £25bn, but the estate agent predicts it could rise to £70bn by 2021.